I detour from our normal blog path today to look at something fascinating that happens during this month of July. There’s a competition for space travel these days between some of the richest individuals on our planet. They all want to leave our planet for some adventure in space. But how does insurance fit in to all of this – or can it? We look into that in this article!
Launching one of the richest individuals on earth into orbit has proved a leap too far for insurers, who are not ready to price the risk of losing Jeff Bezos or his fellow space travelers.
Amazon CEO Bezos, a lifelong space enthusiast, has been vying with Elon Musk and Richard Branson to become the first billionaire to fly beyond the earth’s atmosphere.
And while insurers are well known for offering coverage for even the most outlandish of risks, at a price, potential accidents in space are not yet among them.
Being uninsured in space is nothing new. NASA and the U.S., in general, do not buy liability coverage, with government launches basically insured by taxpayers, Richard Parker of Assure Space said.
“Space tourism involves significant risk, but is not an issue life insurers specifically ask about as yet because it is so rare for anyone to travel into space,” Insurance Information Institute (III) spokesperson Michael Barry said.
There is a nearly $500 million market to insure satellites, rockets and unmanned space flight, but no legal requirement for an operator such as Blue Origin, which Bezos founded, to insure passengers for injury or death or for space tourists to have life cover, brokers and insurers said.
“We’re not aware of a case where anybody is insured against passenger liability,” Neil Stevens, senior vice president, aviation and space at Marsh, the world’s biggest insurance broker, told Reuters.
Assuming they lift-off as planned this month, Bezos and the other wannabe astronauts on Blue Origin’s New Shepard spacecraft will not only spend several minutes 62 miles (100 km) above the earth in a truck-sized capsule, they also have to get back.
The only group that has regularly flown humans sub-orbitally since the 1960s is Branson’s Virgin Galactic. All have been tests, with one failure in 2014 resulting in a death. Blue Origin has flown 15 unmanned sub-orbital flights with no failures, Seradata SpaceTrak data showed on June 10.
Bezos, Blue Origin and Virgin Galactic did not respond to requests for comment from Reuters on their insurance plans and flight records.
‘Different Risk Profiles’
Being uninsured in space is nothing new.
NASA and the U.S., in general, do not buy liability coverage, with government launches basically insured by taxpayers, Richard Parker of Assure Space, a unit of insurer AmTrust Financial that provides space insurance, said.
NASA astronauts are eligible for government life insurance programs, a NASA spokesperson said in an emailed response.
Charles Wetton, underwriting manager for space policies at insurer Global Aerospace, said astronauts on government-funded missions are carefully selected for their knowledge, skills and fitness and train for several years before blast off.
“They and their families understand the risks of the work they do,” Wetton said.
But commercial space cadets may only get a few days of training for a sub-orbital flight or a few months for a ride to the International Space Station (ISS), Wetton said, adding: “These represent two very different risk profiles that insurers will take into account.”
Blue Origin on its website says the spaceflight passenger will receive training the day before the launch, including mission and vehicle overviews, safety briefings, mission simulation and instruction on in-flight activities.
Virgin Galactic said participants will get three days of training and preparation before the launch.
Insurers expect iron clad waivers and contracts from commercial space travel firms, stating they will bear no burden if a passenger dies during a flight.
NASA has called for responses from the industry for its plans for a liability framework for privately-funded astronaut missions to the ISS. NASA’s plans include requiring private astronauts to buy life insurance.
Blue Origin plans for its six-seater spacecraft to take off on July 20 and fly for four minutes beyond the boundary between the earth’s atmosphere and outer space, where passengers will experience total weightlessness.
There is almost ALWAYS an insurance angle to events and stories. I find this one interesting and maybe you do as well. How can any company really insure this risk. It’s a challenge for sure.
We like to say “if it can be insured, we insure it and we service it too!” In this case, we would have to pass but if you have an insurance need, there’s a very good chance we can help you. Call or TEXT us at 615.377.1212 or email us at info@BentonWhite.net. We’re approaching 43 years in this business and would consider it a privilege to help you or someone you know!
Stay safe and as always, thanks for reading!
(Portions of this blog were taken from a Reuters News story.)
