Page 39 - Insurance Times October 2023

launching the satellite if the launch operation fails; replacing A) Satellite Risk Coverage: Satellite risk coverage is
the satellite if it is destroyed, positioned in an improper orbit, insurance against damage to the satellite itself. There
or fails in orbit; and liability for damage to third parties are four basic types of coverage available in this section.
caused by the satellite or the launch vehicle. 1. Pre-launch insurance provides coverage for loss or
damage to the satellite or its components from the
In 1965 the first satellite insurance was placed with Lloyd's time they leave the manufacturer's premises,
of London to cover physical damages on pre-launch for the during the transit to the launch site, through
"Early Bird" satellite Intelsat I. In 1968 coverage was testing, fueling, and integration with the launcher
arranged for pre-launch and launch perils for the Intelsat up until the time the launcher's rocket engines are
III satellite. Satellites are very complex machines which are ignited for the purpose of the actual launch.
manufactured and used by governments and a few larger 2. Launch insurance provides coverage for the period
companies. The budget for a typical satellite project can be from the intentional ignition of the engines until the
in excess of billions of dollars and can run 5-10 years including satellite separates from the final stage of the
the planning, manufacturing, testing, and launch. launch vehicle, or it may continue until completion
of the testing phase in orbit. Coverage typically runs
Why to insure Satellite Risks? for a period of twelve months, but is limited to 45-

1. Commercial requirement versus Government and inter- 60 days in respect to the testing phase in orbit.
Government Projects; Launch failure is the greatest probability of satellite
2. Typical Investment Costs : Satellite / Launch / Insurance loss and approximately 7% of satellites have failed
on launch.
requirements;
3. Coverage while in orbit provides for physical loss,
3. Requirement of Banks and Project Financial backers
damage, or even failure of the insured satellite
4. High risk of failure while in orbit or during orbit placement. Elements
5. International / National Law/ Convention (Covering of risk attached to satellites during orbit are
various Liability Risks) damage caused by objects in the hostile space
environment, extremes of temperature, and
6. Special Characteristics like -
radiation. Because it is not typically possible to
Technology
repair a satellite once it is physically placed in orbit,
Total Loss of Satellite / Project / Business the coverage is basically granted as a product
In accessibility in Orbit guarantee.
4. Third party liability is the final section of the policy,
Replacement time
and is a statutory requirement of the Government
Who buys Satellite Insurance? of the nation where the launch will take place,
7. Event coordinator - like NASA, ISRO, etc, regardless of the nationality of the satellite owner.
A special license must be provided to the regulating
8. Satellite Manufactures authorities before a launch can take place.
9. Launch Service Providers Coverage usually runs up to 90 days following the
actual launch. Loss of revenue coverage is also
10. Satellite Buyers
available but is not purchased often.
11. Satellite Operators
B) Ground Risk Coverage: As many ground stations are
12. Satellite Users
run by large government entities such as NASA, ISRO,
13. Other financial interest holders - like. Banks & / or etc. - so failure on this part of the insured is rare. In
Concerned investors cases where failure occurs due to events which are
beyond the control of the insured (such as an
4. Basics of Satellite Insurance: earthquake), coverage provides for the cost of hiring

Insurance available for satellites is divided into two premises, replacing computer systems, software
sections, A) Satellite Risk Coverage and B) Ground Risk backup, and other items necessary to resume
Coverage. operations.

The Insurance Times October 2023 37