Do tourists going to space need insurance?

EArlier this month, a PSLV-C62 launched in the morning time from Satish Dhawan blank Centre in Sriharikota. Proceedings after liftoff, the skyrocket drifted away course and crashed into the southern Indian Ocean. Sixteen satellites were lost. These included DRDO’s surveillance satellite Anvesha and payloads from startups from India other countries like Brazil, Spain, UK, Nepal and Thailand. A complete loss of $200-250 million. Most of the startups that had payloads on the rocket, had no insurance and might have to fold soon because of this loss. And experts say that because the PSLC has seen two successive failures, insurance premiums for companies willing and able to take protection could rise sharply.This incident, is one of the reasons that Indian Space Association (ISpA), the industry body for space startups in India has recommended space insurance as an essential part of the upcoming budget of India. “Space insurance needs clearer operational procedures, stronger domestic underwriting capacity and specialised products tailored to launch and satellite risk,” says AK Bhatt, director general, Indian Space Association. After all, rockets are risky business.Also read: Isro plans ‘space tourism’ by 2030 at ₹6 crore per passengerThe space boom is here. According to the Satellite Industry Association, a US-based non-profit trade organization, there were 259 launches to space in 2024, including 224 commercial ones. This drove the global commercial launch revenues to $9.3 billion, a 30% increase compared with 2023. Compared to this, space insurance has only grown at a 5-9% rate annually. From 2025 to 2026, space insurance will grow at a humdrum 9.1% CAGR from $4.06 billion to $4.43 billion according to a report by Research and Markets. Another report by Market Growth pegs it at a growth of 5.17% from 2026 to 2035. The reason is risk – something that insurance companies are seriously averse towards. A single launch failure such as the PSLV incident can burn hundreds of millions of dollars in assets in a split second. And up in space, many things can go wrong.Bhatt understands why premiums can be high. The carrier or rocket might explode during launch. It might explode when about to go into orbit, or the satellites that are being sent might malfunction or never deploy, or get damaged or collide with a space object. In 2023 for example, claims of insurance spiked to nearly $1 billion because of two major failures. ViaSat-3, an American satellite failed to deploy its large mesh antenna. SES and Boeing owned o3b mPOWER developed electrical issues. That year, the claims were of about $1 billion while the premiums collected were only $557 million. “The loss records and ongoing uncertainties have prompted some to exit the space,” explains Rob Schenone, Head of Aerospace at AXA XL Insurance, one of the handful of firms that offer space products, adding that many a times, this kind of insurance is loss for the company.After 2023, while some companies stopped space insurance, others increased premiums by as much as a 100%. Still others broke their offerings, giving multiple layers of separate insurance coverage, each addressing a different phase or peril of launching into space. Now companies like Aon and March offer pre-launch insurance which protects the spacecraft during manufacturing, assembly, testing or any damage before it attaches itself to a rocket or a launch vehicle. This is separate from launch insurance which covers the rocket exploding at launch or engine failure before it’s placed in-orbit. Once in the orbit, another insurance called in-orbit insurance kicks in which covers against malfunction, design failure, power-loss or collisions with space debris.Size does matterIn many ways, insuring satellites in the past was easier. In 1965, Lloyd’s of London underwrote the first satellite insurance policy for Intelsat covering pre-launch damage. The satellite launch was successful and no claim was filed. Till a couple of decades ago, satellites were massive (some half the size of a football field), expensive assets that were critical to companies that offered cable TV, GPS and internet. Insuring these were essential for these businesses. Premiums were hefty, losses few.Also read: Isro scientist becomes first Indian tourist to go to edge of spaceNow satellites are tiny – a hundred-odd kilograms heavy – and one company alone might launch as many as 25 satellites every other day, explains Schenone. Their lifespan has also reduced – only seven years as compared to earlier satellites. “The number of satellites has surged and overall premium volume has declined,” he says. That’s because smaller satellites don’t opt for expensive insurance premiums – taking the risk of underwriting the loss in their own accounts. This shift towards smaller satellites has put pressure on the insurance sector.In 2021, about 60% of all launches were covered with insurance. This is down to barely 20% in 2025. Out of roughly 10,000 active satellites in orbit, only about 300 carry insurance today. In Asia, the numbers are worse. Only 18% of satellites launched from Asia Pacific – China, Japan and India – are fully insured. One of the reasons the satellites on PSLV weren’t insured was that the premiums were as high as 50% of the satellites’ value – not something that startups could afford. With two consecutive failures of the PSLV rocket, experts estimate that insurance premiums for the satellites using PSLVs will jump 20-30 % thanks to the failures. That’s almost 60-70% of the cost of the satellite. “For young companies operating on tight capital cycles, insurance becomes a significant cost barrier,” says Bhatt, hoping that it’ll change in the near future.Then there’s debris.As Low-Earth Orbit (LEO) fills up, there’s a new problem facing insurance companies: space debris. It’s estimated that 36,500 tracked debris objects larger than 10 cm, over 600,000 objects between 1-10 cm orbit around Earth. All of these pose threat to operational satellites increasing third-part collisions and damage in altitudes between 400-1200 kms. There’s a higher chance of a successfully launched and running object to simply be hit by something in space and malfunction.Since November 2025, for example, Chinese astronauts have been stranded in Tiangong Space Station as their return capsule was damaged by small space debris. To tackle tracked space debris and the threat it poses to working satellites, a new type of insurance called third-party liability has become essential. In the UK and Europe, third-party is a legal requirement. This insurance covers damages or injuries that your space object might do to other space objects. In 2024, Tata AIG expanded into space (the first in India) by offering third-party liability, covering bodily injury and damage caused by natural occurrences such as solar storms to orbiting spacecraft. But insurance companies do not cover untracked micro-debris – as small as paint chips or tiny bolts – that can also damage a satellite.New insurance for new threatsWith a space like space insurance, there’s always something new brewing. To adapt to the era of megaconstellations, companies like Global Aerospace are offering “mission portfolio” policies. These are like floater plans for families of satellites. Other insurance that’s becoming important as more satellites go up, is Space Cyber, which covers a satellite in case it has been hacked in space.Also Read: Explained: How to become a space tourist and the costThen there’s the new frontier that needs insurances: human spaceflight and tourism. This one will be offered to space tourists – policies for medical, life and even trip-cancellation. Future policies might include on-planet activities like lunar landings or asteroid mining.Space is risky, but it also fascinates all of us. This is true for insurance also, traditionally a risk-averse profession. Will insurance companies be able to build enough of a cushion to survive all the dangers of space? Or will debris make them give up? Remains to be seen.(Shweta Taneja is an author and journalist based in the Bay Area. Her fortnightly column will reflect on how emerging tech and science are reshaping society in Silicon Valley and beyond. Find her online with @shwetawrites. The views expressed are personal.)