Space Insurance

Imagine insuring an asset worth hundreds of crores where there's genuinely no middle ground between total success and total loss, a satellite either reaches orbit and functions correctly, or a launch failure destroys it completely within minutes of liftoff, with essentially no possibility of a partial recovery or repair the way a damaged car or building might be fixed. Space insurance exists specifically to manage exactly this all-or-nothing risk profile, a genuinely unusual insurance category compared to most conventional insurance products.

The industry breaks this risk into distinct phases, launch insurance covers the genuinely high-risk period from liftoff through the satellite reaching its intended orbit, historically the phase with the highest failure probability, while in-orbit insurance covers the satellite's operational life afterward, protecting against equipment malfunction, power system failure or other technical issues that could shorten a satellite's expected operational lifespan.

Pricing this risk requires genuinely specialised actuarial expertise, insurers price premiums based on a specific rocket's historical reliability track record, PSLV's strong reliability history, covered elsewhere on this site, translates into more favourable insurance terms than a newer, less-proven launch vehicle would command, meaning a rocket's accumulated flight history directly affects the cost of insuring payloads flying on it.

As India's private launch vehicle sector grows, covered elsewhere on this site, newer companies like Skyroot and Agnikul face a genuine chicken-and-egg insurance challenge, insurers price new, unproven rockets more cautiously given the lack of track record, while those same companies need affordable insurance to attract paying satellite customers in the first place, a dynamic every new launch provider globally has had to work through as they build up the flight history that eventually earns more favourable insurance terms.