Launching one of the world’s wealthiest people into space has proven too risky for insurers, who are unwilling to price the risk of losing Jeff Bezos or his fellow space travelers.
Bezos, a lifelong space enthusiast, has been competing against Elon Musk and Richard Branson to be the first billionaire to fly beyond the Earth’s atmosphere.
And, while insurers are well-known for covering even the most outlandish of risks at a reasonable price, potential space accidents are not yet included.
“While space tourism entails significant risk, it is not a topic that life insurers specifically inquire about at the moment due to the rarity of space travel,” Insurance Information Institute (III) spokesperson Michael Barry said.
There is a nearly $US500 million market for satellite, rocket, and unmanned space flight insurance, but there is no legal requirement that an operator such as Blue Origin, which Bezos founded, insure passengers for injury or death or that space tourists have life insurance, brokers and insurers said.
“To our knowledge, no one is insured against passenger liability,” Neil Stevens, senior vice president, aviation and space at Marsh, the world’s largest insurance broker, told Reuters.
If all goes according to plan, Bezos and the other would-be astronauts aboard Blue Origin’s New Shepard spacecraft will not only spend several minutes 62 miles (100 kilometers) above the Earth in a truck-sized capsule, but they will also have to return.
Since the 1960s, only Branson’s Virgin Galactic has flown humans suborbitally on a regular basis. Each has been a test, with one failure resulting in a death in 2014. Blue Origin has successfully completed 15 unmanned suborbital flights, Seradata SpaceTrak data showed on June 10.
Reuters reached out to Bezos, Blue Origin, and Virgin Galactic for comment on their insurance policies and flight records.
It is not novel to be uninsured in space. NASA and the US government in general do not purchase liability insurance, with government launches being largely insured by taxpayers, according to Richard Parker of Assure Space, a space insurance unit of insurer AmTrust Financial.
NASA astronauts are eligible for government-sponsored life insurance programs, according to an emailed response from a NASA spokesperson.
According to Charles Wetton, underwriting manager for space policies at insurer Global Aerospace, astronauts on government-funded missions are carefully chosen for their knowledge, skills, and fitness, and undergo extensive training prior to launch.
“They and their families are aware of the dangers associated with the work they do,” Wetton said.
Commercial space cadets, on the other hand, may receive only a few days of training for a suborbital flight or a few months for a ride to the International Space Station, Wetton explained, adding that “these represent two very distinct risk profiles that insurers will consider.”
According to Blue Origin’s website, the spaceflight passenger will receive training the day before the launch, which will include an overview of the mission and vehicle, safety briefings, mission simulation, and instruction on in-flight activities.
Virgin Galactic stated that participants will receive three days of pre-launch training and preparation.
Insurers anticipate unequivocal waivers and contracts from commercial space travel companies stating that they will bear no liability in the event of a passenger death during a flight.
NASA has requested industry feedback on its plans to establish a liability framework for privately funded astronaut missions to the International Space Station. NASA intends to require private astronauts to purchase life insurance.
Although it is still early, coverage for space tourists may be the next step, according to Tim Rush, senior vice president, US space, at insurance broker Gallagher. Currently, the life insurance market provides individual coverage of $2-5 million for private astronauts.
Commercial space operators are required to carry only third-party liability insurance, which is primarily used to cover property damage on Earth or to a flying aircraft, according to Akiko Hama, client executive, space and aerospace underwriting at Global Aerospace.
Blue Origin intends to launch its six-passenger spacecraft on July 20 and fly for four minutes beyond the earth’s atmosphere’s boundary with outer space, where passengers will experience total weightlessness.
The insurers and brokers told Reuters that a critical question for the sector’s development is whether risks associated with tourism fall under the space or aviation insurance lines.
All activities in space are governed by the United Nations Outer Space Treaty and the 1972 Liability Convention, and only a few countries have a legal framework for commercial human spaceflight, they said.
Lloyd’s of London issued the first aviation insurance policy in 1911. A few years later, the market insured Charles Lindbergh and his single-engine plane for $US18,000 for their nonstop flight from the US to Europe.
Space travel is distinct, according to Marsh’s Stevens, because passengers return to the same location from which they left, effectively making it a domestic trip to which international aviation insurance cannot be applied, implying that there will be no liability limitation.
“The aviation, aircraft insurance, and similar markets are less willing to take on risks involving spacecraft,” he explained, adding that the question of whether space tourism trips fall under aviation or space insurance is a “million-dollar question.”
While air travel is governed by rules establishing airline liability in the event of a passenger’s death, Stevens stated that he was unaware of any plans to establish similar rules for space tourism.
Wetton, however, stated that Global Aerospace had begun receiving inquiries from companies interested in suborbital missions.
“Perhaps in ten years’ time, aviation and spaceflight will look very similar,” Parker of Assure Space predicted.
“Some legislator will say, look, we’re now flying regular Joes on these launch vehicles, and we need to protect them,” Parker added.