Legislation on Space Insurance in UK

Legislation on Space Insurance in UK image
By Chris Gibbs, Head of Space, AmTrust at Lloyd’s of London

It’s official: The UK is on a mission to join the world’s commercial space race.

In the summer of 2018, the UK Space Agency announced its selection of Sutherland, Scotland, as the site for the UK’s first spaceport. The vertical launch facility will send small satellites into polar orbit.

Home to miles of sparsely populated countryside, Scotland’s north coast was an easy choice for the UK Space Agency, which also runs the UK’s civil space program. Highlands and Islands Enterprise, a Scottish economic and community development agency, is leading the development of the launch site. Another key contributor to the project is Lockheed Martin, the United States’ largest defense contractor.

Poised to turn the UK into the European hub for small satellites, the government has awarded grants totaling £33.5 million to develop its vertical launch capabilities.

Changing Planes and Economic Forecasts

The UK isn’t limiting itself to just one way of thinking. In addition to vertical launch sites, plans for horizontal launch sites in Cornwall, Glasgow and North Wales are underway. Space planes will fly from these future spaceports carrying satellites and tourists.

Spaceport Cornwall has already teamed up with California-based Virgin Orbit with designs to air-launch satellites using a modified Boeing 747 jet. The English-American partnership is estimated to create as many as 480 jobs and contribute £25 million a year to the local economy, according to the Cornwall government. The first launches could happen as soon as 2021.

One Bill, Endless Opportunities

Scottish satellites could be bursting through the atmosphere as soon as 2020 thanks to the Space Industry Bill.

Recently signed into law, the Space Industry Bill establishes a framework for the regulation of spaceflight activities in the UK. The legislation also establishes:
  • A system of licensing for UK space activities 
  • Powers for the Secretary of State to appoint a regulator(s) to ensure public safety
  • New offenses and applies existing UK criminal law to space activities
  • A framework for liability, indemnities and insurance for UK space activities

Sky-High Expectations – and Risks

With new opportunity comes new risk, and industry stakeholders find themselves concerned about the absence of a mandatory cap on liability for spacecraft operators.

A regulation in the new Space Industry Act (SIA) appears to counter an amendment made to the Outer Space Act in 2015. The amendment imposed a £60 million cap on the amount for which spaceflight companies are required to indemnify the government in the event of a claim. The new regulation, however, limits this liability strictly to spaceflight activities and it applies only to spacecraft operators.

Additionally, the SIA contains two sections that empower the UK government to put limits on an operator’s liability to indemnify the government and third parties to “ensure the spaceflight sector can grow.”

Despite the risks, interest in the spaceports is destined to skyrocket, as horizontal and vertical launch services could be worth £3.8 billion to the British economy over the next decade. The UK government hopes to increase its share of the £40 billion global space market from 6.5 percent to 10 percent by 2030.

Chris Gibbs is the head of the Space Underwriting Division for AmTrust Financial Services, a multinational property and casualty insurer headquartered in New York City. Based in the United Kingdom, Mr. Gibbs leads a team of space underwriters focused on building the company’s book of business in this growing niche market.

For more information, contact Mr. Gibbs at chris.gibbs@amtrustgroup.com.

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