EU Space Act: A driver for space insurance?
The article was first published on July 14 in Versicherungsmonitor.
On June 25, 2025, the EU Commission presented the draft for an EU Space Act, which is intended to regulate space activities based on uniform European standards from 2030 onwards, something that many consider to be long overdue. Such standardization would be welcome from the perspective of the insurance industry in order to make the complex risk landscape clearer and improve the range of insurance solutions on offer.
With the presentation of the EU Space Act, the European Commission aims to make history and strengthen the space economy in the European Union in the face of international competition. The stated goal of the new legislation is to make the European space economy cleaner, safer, and more competitive through harmonized standards. The European Commission's proposal, which is intended to replace 13 national space laws, focuses on three core aspects: safety, resilience, and sustainability.
By creating a unified legal framework for all operators of space objects and space service providers offering their services in Europe, the EU Commission hopes to strengthen the innovative power of the European space industry, which still has some catching up to do in many areas compared to its international counterparts. Uniform rules are intended to increase planning security for the private space industry, especially for start-ups and small and medium-sized enterprises, in order to facilitate their entry into the market.
Challenges of insuring space risks
In the past, access to affordable insurance coverage has proven to be an obstacle for these companies.
For example, in the economically important field of satellite use, which has so far been dominated by players from the United States, there are insurance solutions available to cover the diverse risks associated with satellite activities and to ensure the financial security of operators. Such satellite insurance can cover risks associated with the launch of the carrier rocket or the risks associated with the lifetime of a satellite in orbit.
Nevertheless, it is estimated that only half of all launches are insured. This is because while the cost of launching a satellite is continuously falling, insurance costs are rising, making it difficult for smaller companies in particular to adequately insure against risks that often threaten their very existence. This development is also linked to the increasingly intensive use of space and the associated risks for satellites, for example from space debris.
The insurability of space risks has also been hampered by the fact that, due to the high technical complexity and potentially high claims amounts, it is costly and difficult for insurers to carry out objective risk assessments. These "cost drivers" often lead to smaller market participants (having to) forego insurance coverage, while financially strong space companies, led by SpaceX, bear the risks themselves, which are not existential for them, and also rarely purchase insurance solutions.
Uniform legal framework facilitates insurability
At least on this point, the EU Space Act could help to facilitate the insurability of space risks. This is because it focuses on preventive measures to avoid damage as far as possible through high safety and operating standards and risk management requirements. Such standardization can in turn make the risks more calculable for insurers.
In addition, the sustainability goals pursued by the Commission and a reduction in space debris could also increase the operational safety of satellites in the long term, thereby helping to improve the insurability of space risks.
However, the Commission's proposal does not include any provisions limiting liability for damage caused by space objects. According to the current draft, the relevant provisions will continue to be governed by national law.
The existing national regulations vary greatly: In principle, states are responsible for the space objects they "launch" and are therefore also liable to third parties if such space objects cause damage. The state has a right of recourse against the private perpetrator at least if the respective national space law provides for this, which is usually the case.
The clear and uniform limitation of these recourse claims is of central importance for private operators, if only because national regulations often provide for compulsory insurance and potentially unlimited liability makes it considerably more difficult to insure liability risks.
Outlook
With regard to the insurability of space risks, a clear legal framework, including the standardization of risk and safety standards, can make an important contribution to improving and facilitating the availability of space insurance solutions. However, it remains to be seen whether the EU Space Act will be able to meet the EU Commission's ambitious goals and create a clear and harmonized framework that reduces administrative burdens, protects space resources, and creates fair and predictable conditions for businesses. The Commission's proposal still has to go through the European legislative process and may therefore be subject to changes.
From the perspective of insurers and brokers, it would be welcome if the further legislative process could achieve harmonization not only of safety and operating standards, but also of liability limits for liability risks.
