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Liability, Law, and the Risk of Denial

The legal stakes are significant. International treaties such as the Outer Space Treaty and Liability Convention establish frameworks for claims arising from space activities. Yet private insurers have made no comparable disclosure of how these frameworks would translate to mass claims from ordinary businesses, homeowners, or municipalities if a celestial event caused ground damage. Would carriers pay? Or would they invoke exclusions en masse, leaving governments to act as backstops while shareholders flee?

The journal warns of market volatility: over 40% of insured losses in space insurance occur during launch, and about 41% occur within the first two months in orbit. If losses from a single satellite failure can rock pricing, imagine the impact of a cascading satellite collision triggered by debris from a comet or asteroid. The absence of a public plan, disclosure, or even an industry dialogue on this front is no less than a breach of the duty to prepare.

Case Studies Show the Limits

Case studies highlighted in the IJETRM article show insurers underwriting SpaceX launches, OneWeb’s mega-constellation, and Blue Origin’s suborbital flights. These policies are finely tuned to very specific risks: a rocket explosion, a satellite collision, or an injured space tourist. But none of them speak to the broader catastrophe model that would apply if an interstellar object were to disrupt Earth-orbiting systems.

As we reported previously, the silence on 3I/ATLAS is not harmless. It is a warning sign. While insurers experiment with granular coverage for space tourism, they avoid the more frightening modeling question: what happens if the next asteroid doesn’t miss?

What’s Next

Astronomers will regain sight of 3I/ATLAS soon, and Apophis’s 2029 flyby is not far on the horizon. For insurers, the procedural roadmap is clear. They must disclose their space-risk modeling, update policy language to address space events directly, and prepare contingency plans for claim processing. Regulators in Washington, Brussels, and beyond may be forced to mandate disclosures, just as climate risk reporting has become compulsory in securities filings. Without that, the next major celestial scare could also trigger litigation against insurers accused of misleading shareholders or abandoning policyholders.