From what I can understand the topic of insuring nano-satellites is at the forefront of discussions now. The overall Space Industry Act has passed and has given the appropriate ministry the approval to setup regulation around Insurance. The ministry will look into ways of insuring per event(i think this means launch) as opposed to per satellite. It is a step forward in making the constellations more affordable.
Discussions around the bill
https://hansard.parliament.uk/lords...-4EFA-8A5E-C286F21ACA65/SpaceIndustryBill(HL)
Also Some extracts from the bill discussion not in the link above.
3. Space Industry Bill
3.1 Outline of the Bill
Creates a framework for liability, indemnities and insurance for UK space activities;
There was some discussion during the Lords stages regarding the lack of detail with respect to the licencing scheme under the Bill. Concerns were raised regarding small ‘nano-satellites’ which are often launched in ‘constellations’ consisting of many small satellites in a group.46 The Outer Space Act currently requires each satellite to be licenced (and insured) separately. Small satellites are considered to have significantly lower risk associated with their launch than compared to large geostationary satellites.
During the Lords stages, the Parliamentary Under-Secretary of State, Baroness Sugg, explained work that the UK Space Agency has been doing with respect to reviewing the licence and insurance requirements for small satellites, stating that the Agency was working on a policy model for the licencing and insurance of small satellites on a per-event rather than per-satellite basis.47 She stated that the Government expects that the approach to insurance and licencing of nano satellites under the Bill will be mostly set out in guidelines and not within regulations to enable flexibility.48 Further discussion of insurance provisions is set out below (Clause 37). Members remained concerned that currently, industry stakeholders still have little clarity as to what the insurance and licencing costs under the Bill can be expected to be.49
In the context of discussing the licencing regime, Baroness Sugg also explained the ‘traffic light system’ currently used by the UK Space Agency for evaluating licences under the Ou ter Space Act , which is expected to be implemented for licences under the Space Industry Bill
In short, the system sorts applications into three categories: a “green” rating indicates that the mission is likely to be compliant with the operation and design requirements of the UK licencing process; “amber” indicates that with some modification or additional information the mission may be compliant; and “red” indicates that the mission could not be licenced.51
Liabilities, indemnities and insurance Clauses 33–37
provide provisions regarding liabilities, insurance and indemnity. The main concerns raised by peers and industry stakeholders here regard the non-mandatory language used to define the Secretary of State’s powers to limit liability and to indemnify claimants.
Liability Clause 33 imposes strict liability on spaceflight operators for injury or damage caused to persons or property in the UK by their activities (with some exceptions).61 Clause 33(5) provides that the Secretary of State may impose a cap on third-party liability arising under this section. Spaceflight operators are also required to indemnify the UK Government (and other specified regulatory bodies) against claims brought against the government in respect of loss or damage caused by their activities (Clause 35). This is because under the UN 1972 Liability Convention, the UK Government is ultimately liable for third-party costs for accidental damage arising from UK space activities.62 Clause 11(2) states that the Secretary of State may limit the extent of this liability to indemnify the Government as a condition of the operator licence.63
The purpose of the liability caps in Clauses 33(5) and 11(2), if implemented, is to allow spaceflight operators to obtain affordable insurance. A cap on liability is considered a key requirement by industry stakeholders for promoting growth in the industry in the UK, due to the difficulty in obtaining insurance for unlimited liability. Industry stakeholders have argued that the liability caps should be mandatory, as is currently the case for the requirement to indemnify the Government under the
Currently, section 10 of the Outer Space Act 1986 requires that parties carrying out space activities must indemnify the UK Government against loss or damage caused by their activities. Section 5(3) provides that the Secretary of State must set a cap on the amount of an operator’s liability under section 10.65 The UK Space Agency publishes the usual level of the cap in its guidance, which is currently set at €60 million for the majority of cases (single satellite missions).66 The mandatory cap was introduced by the Deregulation Act 2015 following concerns raised by industry regarding the difficulty of obtaining insurance for unlimited liability, which was considered to be a substantial burden on innovation in the sector in the UK and its international competitiveness.67 Other major space launch countries cap liability, for example, the United States, Australia and France.68 The Outer Space Act does not make provision for third-party liability for loss or damage to persons comparable to Clause 33 of the
The Government has not confirmed whether or not liability caps will or will not be imposed by regulations under the Space Industry Bill .70 The Government’s position is that the non-mandatory language in the clauses allowed flexibility while further consultation takes place, especially with respect to the cap on third party liability under Clause 33.71 For further discussion see Section 4.2 below. The policy scoping notes stated that the Government intends to exercise the power under Clause 33(5) to the “ minimum extent necessary to address market failure in terms of the availability of affordable insurance
Insurance It is expected that spaceflight operators will be required to have insurance to meet the liability caps imposed by regulations. Clause 37 provides the Secretary of State with the power to make regulations regarding insurance requirements, including the power to make insurance available should the market not provide it. Some concerns were raised in the House of Lords report stage regarding the lack of clarity for industry so far as to how the insurance and liabilities regime will operate, in particular with regard to small satellites.76 Further discussion is provided in the section on ‘Licencing’ above. The Government expects that insurance will be set on a case-by-case basis in each licence. The regulations made under Clause 37 are expected to provide a methodology for how insurance amounts should be calculated rather than prescribing particular amounts, which will be instead published in guidance.77,78
Liability, indemnity and insurance The main concern raised by industry stakeholders regarding the Bill is the absence of a mandatory liability cap for spaceflight operators.136 See Section 3.2 above for discussion of the provisions regarding operator liability, indemnity and insurance. The issue of the non-mandatory language used in the Bill regarding liability caps for operators was raised during the Committee stages.137 In response to calls that the Government clarify its position on liability caps, the Parliamentary Under-Secretary of State for Transport, Lord Callanan, stated that the Government was in ‘listening mode’.138 Lord Callanan highlighted the difference between a liability cap for third-party liability and a cap on liability with respect to the licensee’s requirement to indemnify the government under Clause 35.139 Lord Callanan explained the non-mandatory language in the clauses allowed flexibility while further consultation took place, especially respect to the cap on third party liability, which is not currently provided for under the Outer Space Act
5. Reaction and comment on the Bill 5
.1 Pre-legislative scrutiny by the Science and Technology Committee
The Science and Technology Committee welcomed the Draft Spaceflight Bill and commented that there was support from industry. Several of the Committee’s concerns regarding delegated powers and the provisions regarding licencing and insurance in the Bill are discussed in section 3.1 (delegated powers); section 3.2 (licencing system) and section 4.3 (liability, indemnity and insurance). The Committee also noted that the Impact Assessment produced by the Government was published in September 2016 as part of the Government’s Modern Transport Bill, and has not been updated since the Government decided to legislate for spaceflight separately. The Committee recommended that the Government produce an updated Impact Assessment along with any revised version of the Bill.144 The Government response stated that it did not consider it was necessary to produce a new Impact Assessment as the underlying evidence base for the Bill had not changed.145 It stated that Impact Assessments would be produced during the subsequent programme of secondary legisla
5.2 Industry comment
In evidence submitted to the Science and Technology Committee’s Draft Spaceflight Bill inquiry, the Government’s intention to reform the legal and regulatory framework for spaceflight activities was welcomed by representatives from the space industry, such as the Royal Aeronautical Society, Virgin Galactic and Airbus.148
Liability There were several amendments tabled regarding the liability cap of operators to indemnify the Government and/or third parties. SNP spokesperson, Dr Philippa Whitford, moved motions to secure a mandatory cap on both the operator’s liability against uninvolved third parties and the liability to indemnify the Government against claims for loss or damage brought against it. She argued that industry requires certainty that liability caps will be implemented and that absence of certainty regarding a cap would inhibit the competitiveness of the UK space industry.160 The Minister argued that there had not yet been adequate consultation on the appropriateness of a cap on liability in respect of space activities launched from the UK, where the risk for UK taxpayers is greater than for activities launched overseas.161 For further discussion see page 26 above. SNP amendment 5 to Clause 11(2), which sought to make it mandatory that licence conditions specify a cap on liability, was pushed to a division and fell 2 votes to 10.162
