Insurance of Space Activities in the Era of Satellite Constellations

Abstract

The rapid expansion of satellite constellations has transformed the legal, technical, and financial structure of contemporary space activities. Traditional space-insurance models were developed for individually valuable satellites, discrete launch missions, and comparatively limited orbital traffic. They are therefore increasingly unable to address the systemic, cumulative, and transnational risks associated with large constellations. This article examines the adequacy of existing international and national legal frameworks for insuring space activities in the constellation era. Using a descriptive-analytical and comparative legal approach, it evaluates the relationship between space insurance, State responsibility, launching-State liability, registration obligations, national licensing systems, and commercial risk allocation. The analysis identifies major challenges, including correlated losses, batch-launch failures, orbital congestion, collision and debris risks, autonomous operational systems, cyber-physical incidents, spectrum interference, data-related liability, service interruption, fragmented jurisdiction, and limited insurance-market capacity. The article argues that conventional first-party, launch, in-orbit, and third-party liability policies cannot adequately respond to these interconnected risks. It therefore proposes a multi-layered insurance regime composed of compulsory operator financial responsibility, constellation-level systemic coverage, an industry mutual-risk pool, conditional State-backed excess protection, and an international compensation fund. The proposed framework is further supported by harmonized minimum standards, expanded registration and transparency requirements, specialized insurance products, standardized contractual clauses, international loss databases, and technically informed dispute-resolution mechanisms. The article concludes that space insurance should function not merely as a compensatory device but also as a regulatory instrument capable of promoting safer design, cybersecurity, collision avoidance, debris mitigation, operational transparency, and responsible end-of-life practices. A coordinated and risk-sensitive insurance regime is essential for protecting victims, limiting State exposure, sustaining commercial investment, and preserving outer space as a secure, equitable, and sustainable environment.