Earlier this month, PSLV-C62 was launched in the morning from the Satish Dhawan Space Center in Sriharikota. Minutes after takeoff, the rocket veered off course and crashed into the southern Indian Ocean. Sixteen satellites were lost. These included DRDO’s surveillance satellite Anvesha and payloads from startups from countries like Brazil, Spain, UK, Nepal and Thailand apart from India. Total loss of 200-250 million dollars. Most startups that had payloads on rockets had no insurance and may have to shut down soon due to this loss. And experts say that since PSLC has seen two consecutive failures, insurance premiums could rise sharply for companies willing and able to take on protection.
This phenomenon is one of the reasons why the Indian Space Association (ISPA), the industry body for space startups in India, has recommended space insurance as a mandatory part of India’s upcoming budget. “Space insurance requires clear operating procedures, strong domestic underwriting capacity and specialized products tailored to launch and satellite risks,” says AK Bhatt, director general of the Indian Space Association. After all, rockets are risky business.
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The space boom is here. According to the Satellite Industry Association, a US-based non-profit trade organization, there are 259 launches into space in 2024, including 224 commercial launches. This brings global commercial launch revenue to $9.3 billion, an increase of 30% compared to 2023. In comparison, space insurance has grown at only 5-9% annually. According to a report by Research & Markets, from 2025 to 2026, space insurance will grow at a modest 9.1% CAGR from $4.06 billion to $4.43 billion. Another report on market growth has projected a growth of 5.17% from 2026 to 2035. The reason for this is risk – something that insurance companies are seriously averse to. A single launch failure like the PSLV incident can burn millions of dollars worth of assets in a second. And up in space, many things can go wrong.
Bhatt understands why premiums can be high. The carrier or rocket may explode during launch. It may explode while in orbit, or the satellites being sent may malfunction or never deploy, or may be damaged or collide with a space object. For example, in 2023, two major failures caused insurance claims to rise to nearly $1 billion. ViaSat-3, an American satellite failed to deploy its large mesh antenna. SES and Boeing-owned o3b mPOWER developed electrical problems. That year, claims were nearly $1 billion while premiums collected were only $557 million. “The loss record and ongoing uncertainties have led some people to exit the sector,” explains Rob Shannon, head of aerospace at
After 2023, while some companies stopped space insurance, others increased premiums by up to 100%. Still others break up their offerings, offering multiple layers of separate insurance coverage, each addressing a different phase or risk of launching into space. Now companies like Aon and March offer pre-launch insurance that protects spacecraft during manufacturing, assembly, testing or any damage before they are attached to the rocket or launch vehicle. This is different from launch insurance which covers the rocket’s explosion at launch or engine failure before it is placed in orbit. Once in orbit, another insurance called in-orbit insurance kicks in, covering against malfunction, design failure, power-loss or collision with space debris.
size does matter
In many ways, satellites were easier to insure in the past. In 1965, Lloyd’s of London wrote the first satellite insurance policy covering pre-launch damage for Intelsat. The satellite launch was successful and no claims were filed. Until a few decades ago, satellites were massive (half the size of a football field), expensive assets that were vital to companies offering cable TV, GPS, and Internet. It was essential for these businesses to insure them. Premiums were heavy, losses were small.
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Now satellites are smaller – hundreds of kilograms heavy – and one company alone can launch 25 satellites every other day, Shannon explains. Their lifespan has also been reduced – only seven years compared to earlier satellites. “The number of satellites has increased and the total premium volume has declined,” he says. This is because smaller satellites do not opt for expensive insurance premiums – risking losses in their own accounts. This shift toward smaller satellites has put pressure on the insurance sector.
In 2021, about 60% of all launches were covered by insurance. This is reduced to barely 20% in 2025. Of the approximately 10,000 active satellites in orbit today, only 300 are insured. In Asia, the numbers are worse. Asia Pacific – Only 18% of satellites launched from China, Japan and India are fully insured. One reason the satellites on PSLV were not insured was that the premium was up to 50% of the value of the satellites – not something startups could afford. With two consecutive failures of the PSLV rocket, experts estimate that insurance premiums for satellites using PSLV will increase by 20-30% due to the failures. This accounts for approximately 60–70% of the cost of the satellite. “Insurance becomes a significant cost barrier for young companies operating on distress capital cycles,” says Bhatt, who hopes this will change in the near future.
Then there is the debris.
As low-Earth orbit (LEO) fills up, insurance companies face a new problem: space debris. It is estimated that there are 36,500 tracked debris objects larger than 10 cm, with over 600,000 objects between 1–10 cm orbiting around the Earth. All of these pose a threat to active satellites, increasing third party collisions and damage at altitudes of 400–1200 km. The chances of a successfully launched and moving object colliding with something in space and causing damage to it are high.
For example, as of November 2025, Chinese astronauts have been stranded at the Tiangong Space Station because their return capsule was damaged by small space debris. To deal with tracked space debris and its threat to operating satellites, a new type of insurance called third-party liability has become necessary. In the UK and Europe, third-parties are a legal requirement. This insurance covers damage or injuries caused by your space object to other space objects. In 2024, Tata AIG expanded into space (a first in India) by offering third party liability, covering bodily injury and damage caused by natural phenomena ranging from solar storms to orbiting spacecraft. But insurance companies don’t cover untracked microscopic debris – such as paint chips or small bolts – which can also damage the satellite.
New insurance for new risks
With a place like Space Insurance, there’s always something new being created. To adapt to the era of megaconstellations, companies such as Global Aerospace are offering “mission portfolio” policies. These are like floater plans for families of satellites. Other insurance that is becoming important as more satellites go up is space cyber, which covers if a satellite is hacked in space.
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Then there’s the new frontier that requires insurance: human spaceflight and tourism. It will be offered to space tourists – medical, life and even trip-cancellation policies. Future policies may include planetary activities such as lunar landings or asteroid mining.
Space is risky, but it also fascinates us all. The same is true for insurance, which is traditionally a risk-averse profession. Will insurance companies be able to create adequate security systems to cover all the dangers of space? Or will the debris force them to give up? remains to be seen.
(Shweta Taneja is a writer and journalist based in the Bay Area. Her fortnightly column will highlight how emerging technology and science are reshaping society in Silicon Valley and beyond. Find her online with @shwetawrites. Views expressed are personal.)
