Space Flights for Richard Branson and Jeff Bezos Spur Race for Underwriters

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Richard Branson Planned to fly into suborbital space Sunday, nine days in advance similar journey a billionaire by Jeff Bezos. These first flights for the space giants will also begin without liability insurance. DealBook newsletter reports.

Brokers say none Virgin Galactic nor Mr. Branson The British business boss appears to have bought it if it got hurt or worse. (The craft is 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 talked a lot with these companies about insurance and regulatory issues,” said Sima Adhya, head of space insurance at Hamilton, which offers insurance through Lloyd’s of London. However, there is no written policy specifically for these flights,” he said.

Liability coverage is required on international flights. But Virgin’s craft, VSS Alliance, launches and lands in the same place in New Mexico, so Mr. Branson’s flight, despite rocketing to the edge of space, is technically considered inland travel. Virgin said 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 delegate full responsibility in the event of personal injury or loss of life.

Insurance providers say it’s very likely that regulators will require liability policies soon. Industry experts say space travel will not be covered by a typical life insurance policy. Also, this could be a problem for companies if managers like Mr. BezosI want to travel to space. So-called key person policies could theoretically cover the stock market fallout if something happens to a senior executive.

There aren’t many options for ordinary space travelers, but some insurers are interested in developing such policies. Allianz first started designing space tourism policies in 2012, but there is no evidence that one has been sold. (Allianz did not make 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 these policies.

Lloyd’s of London estimates that the space insurance market has averaged $500 million in annual premiums over the past decade. But these policies often cover satellites and other non-human cargo.

“The big question for the insurance industry is whether it’s more like aviation insurance or current space policies,” said Neil Stevens, senior vice president of space products at insurance broker Marsh. “There has never been a situation where insurance markets have not accelerated.”

But for now, space travel begins without an insurance net for passengers. Developing these policies is another small step that is probably needed for space travel to make the leap into a fully functioning tourism market.

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