4.07.2006
Got Space Insurance?
With suborbital space tourism about to take off, a whole new market for the space insurance industry is opening up. Leave it to Lloyd's to step in.This week an item on the Lloyd's Web site referred to talks between the underwriter and Virgin Galactic, which is seeking coverage for its launches from New Mexico scheduled for 2008. (Link via Hobbyspace.)
Lloyd's has a reputation for specialty underwriting of complex and unusual risk. As to issues raised in the press blurb by Bruno Ritchie, director of the aerospace division at Hiscox (a Lloyd's syndicate) including whether Virgin Galactic's risk is an aviation risk or a space risk, etc., no question the underwriters can work these out.
One good example of Lloyd's underwriting space business: Sea Launch, which "presented the insurance industry with a unique challenge combining both space and marine risks." According to Lloyd's, the "complex and comprehensive" Sea Launch coverage included "hull, liability, cargo, aviation and space . . . all aspects of the risk other than the satellites themselves, which were insured by their respective owners."
(By the way, it bears mention here that Willis' space insurance group is in the news this week, too, as Inspace announced the opening of its new office in France, which will focus on "providing space insurance and aerospace consulting services with a primary focus on continental Europe, the Middle East and Africa.")
The FAA has a short overview of space insurance from a few years ago (2002) that is still instructive.
I note that individual states' insurance departments have their own views on space insurance matters. This is not about suborbital space tourism insurance, but for some reason I saved an opinion issued by the Office of General Counsel representing the position of the New York State Insurance Department on satellite insurance. In brief, in case you were wondering, the term "aircraft" includes satellites ( N.Y. Ins. Law § 1113(a)(19) and § 2117(c)(1) (McKinney 2000 & Supp. 2003); an unauthorized insurer may write insurance in New York to cover physical damage to the satellite and legal liability arising out of the launch and orbit of satellite through an excess line broker (N.Y. Comp. Codes R. & Regs. Tit.11, § 27 (2001) (Regulation 41); while coverage for legal liability comes within the exemption under N.Y. Ins. Law § 2117(c)(1), coverage for physical damage to the satellite itself does not; and, no, a broker not licensed in New York may not sell satellite insurance in New York by associating with a New York licensed insurance broker. Or maybe you weren't wondering at all?
(Ok, I just felt like posting that. But please don't e-mail asking me for a 50-state compilation of space insurance opinions. Hey, it's Friday.)
Have a super (if not risk-free) weekend.
