Richard Branson is due to fly into suborbital space this Sunday, nine days before a similar trip by fellow billionaire Jeff Bezos. These first flights to the bumps in space will also be launched without liability insurance, reports the DealBook newsletter.
Brokers say neither Virgin Galactic nor Mr Branson appear to have bought cover if the UK business mogul were to be hurt, or worse. (The craft is probably covered.) The same goes for Mr. Bezos and his company Blue Origin. Virgin, Mr. Branson and Blue Origin declined or did not respond to requests for comment.
“We’ve talked to these companies a lot about insurance and regulatory issues,” said Sima Adhya, space insurance manager at Hamilton, a company that offers insurance through Lloyd’s of London. “But there were no policies specifically written for these flights.”
Liability coverage is required on international flights. But the Virgin machine, the VSS Unity, takes off and lands in the same place in New Mexico. As such, Mr. Branson’s flight, despite rocket to the edge of space, is technically considered an inner journey. Virgin has said passengers would eventually be required to sign a contract agreeing to be fully responsible for their own safety, but US law makes it nearly impossible to transfer all liability for personal injury or loss of life.
Insurers say it’s very likely that regulators will soon require liability insurance policies. Space travel would not be covered by a typical life insurance policy, according to industry experts. And it could also be a problem for companies if executives decided that they, like Mr. Branson and Mr. Bezos, would like to travel to space. So-called key people policies could theoretically cover the stock market fallout if something happened to a senior executive.
There aren’t many options for occasional space travelers, but some insurers are interested in developing such policies. Allianz began designing space tourism policies in 2012, although there is no evidence that a policy was sold. (Allianz did not return a request for comment.) Space tourism is new, but experts say there is now more than enough data on rocket launches to know how to price these policies.
Lloyd’s of London estimates that the space insurance market has averaged $ 500 million in annual premium payments over the past decade. But these policies have generally covered satellites and other non-human cargo.
“The big question for the insurance industry is whether this is more akin to aviation insurance or current space policies,” said Neil Stevens, senior vice president of space products at the insurance broker. Marsh. âThere has not been a situation where the insurance markets have not intensified.
But for now, space travel is starting without an insurance net for passengers. Developing these policies is one more small step that is likely needed before space travel can enter a fully functioning tourism market.