Commercial Space Launch Accidents:
Who Pays?
by Pamela Meredith
Eighth Annual McGill
Conference on International
Aviation Liability &
Insurance Montreal
April 18, 2015
© Pamela L. Meredith 2015
Who pays for satellite launch failures?
Waivers of liability and insurance
Who pays for the launch failure:
 The launch provider?
 The subcontractor with the defective part?
 The satellite customer whose satellite is lost?
 A secondary payload owner whose satellite
caused the failure?
 The launch site operator?
 Other?
Customary risk allocation:
 Satellite customer waives liability: Comprehensive waiver of liability covering
all participants in the launch, regardless of fault; waiver flow-down where no
privity. (U.S. Commercial Space Launch Act or “CSLA” requires it)
 Commercially, the parties often expand the waiver in their contracts
 Satellite customer takes out launch and in-orbit insurance (replacement)
 Prudent launch providers/manufacturers request subrogation waivers
 Satellite lenders require additional insured and loss payee status
Text: Pamela L. Meredith © 2015
2
Who pays for damage to the launch pad?
Waivers of liability and insurance
Who pays for damage to the launch site:
 The launch provider?
 The subcontractor with the defective part?
 The satellite customer whose satellite is lost?
 A secondary payload owner, if the cause?
 The launch site operator?
 The U.S. Federal Gov’t.?
 Other?
Risk allocation – distinguish U.S. Federal ranges and commercial launch sites:
 CSLA mandatory insurance for U.S. Federal ranges – launch provider
obtains
 Does not apply to commercial launch sites
 CSLA mandatory waiver scheme covers all participants in the launch,
including the launch site operator; applies launch site damage
 For Federal ranges, the waiver applies if claims exceed the insurance
 For commercial sites, the waiver applies from the first dollar
 Commercial launch participants obtain insurance as needed
Text: Pamela L. Meredith © 2015
3
Who is liable for injury and death?
Waivers of liability and insurance
Who is liable for injury and death:
 The spaceflight operator?
 The vehicle subcontractor with the defective part?
 The crew?
 The spaceflight participant (SFP)?
 The sponsor of the SFP?
 The insurer and, if so, whose?
Risk allocation – rules and practices in the formative stage:
 No mandatory CSLA insurance for SFPs (not third parties)
 No mandatory SFP CSLA liability waiver against the spaceflight operator;
SFP informed consent
 CSLA mandatory SFP waiver of liability against the U.S. Gov’t
 State statutes designed to shield the spaceflight operator from liability
 Require warning statements (“inherent risk”) to and signature by SFP
 Not apply if “reasonably should have known of a dangerous condition”
 Contractual waivers, liability insurance and subrogation waivers a must
Text: Pamela L. Meredith © 2015
4