Richard Branson is scheduled to fly to suborbital space on Sunday, nine days before a similar trip by billionaire Jeff Bezos. These first flights for the space moguls will also take off without liability insurance, reports the DealBook newsletter.
Brokers say that neither Virgin Galactic nor Mr. Branson bought any coverage should the UK business mogul be injured or worse. (The craft is most likely 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 a lot with these companies about insurance and regulatory issues,” said Sima Adhya, director of space insurance at Hamilton, a company that offers insurance through Lloyd’s of London. “But there are no guidelines written specifically for these flights.”
Liability insurance is required on international flights. But Virgin’s ship, the VSS Unity, takes off and lands at the same location in New Mexico, so Mr. Branson’s flight, despite having shot to the edge of space, is technically considered a domestic voyage. Virgin has said that passengers will eventually have to sign a contract agreeing to be fully responsible for their own safety, but American law makes it nearly impossible to transfer all liability in the event of personal injury or loss of life.
Insurance providers say it is very likely that regulators will soon require liability policies. Space travel would not be covered by typical life insurance, say industry experts. And it could also be a problem for companies if executives decide they want to travel to space like Mr. Branson and Mr. Bezos. So-called key person policies could theoretically cover the consequences of the stock exchanges if something happened to a top manager.
There aren’t many opportunities for casual travelers, but some insurers are keen to develop such policies. The alliance began shaping space tourism policies in 2012, although there is no evidence that one was sold. (Alliance 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 this policy.
Lloyd’s of London estimates that the space insurance market has averaged $ 500 million in annual premium payments over the past decade. But these guidelines have generally covered satellites and other non-human cargo.
“The big question for the insurance industry is whether this is more aviation insurance or more current space policy,” said Neil Stevens, senior vice president of Space Products at insurance broker Marsh. “There has never been a situation in which the insurance markets have not picked up.”
But for now, space travel will start without an insurance network for passengers. Developing these guidelines is another small step likely to be required before space travel can step into a fully functional tourism market.