Traditional space insurance is predominantly built around the physical object in orbit. According to Andrew Bonwick (pictured), vice president of product development at Relm Insurance, that focus can leave wider business dependencies outside the traditional space insurance conversation.
"You're not insuring space businesses, you're just insuring objects in space," Bonwick told Insurance Business UK.
Bonwick said the launch and orbit market is concentrated among a small group of large brokers, where specialist space teams have traditionally operated separately from other lines of cover.
"Those brokers work in silos. You've got a big team that's doing space risk in the same way that those teams have been doing it for 35 years, and it's a very narrow silo," he said.
That silo stays focused on first-party cover for the physical satellite or launch vehicle, leaving supply chain, space-based services and technology, and what he described as "downstream risks" largely outside the conversation. That can include professional indemnity exposure arising from advice provided by a space-based service.
A handful of newer US brokers are trying to close that gap by giving clients a single adviser across manufacturing, operations and services, rather than splitting the account across separate teams and balance sheets. Specialty brokers more broadly are already under pressure to close a widening global protection gap as risks evolve faster than product lines are drawn. In the UK, where several broking houses already have established space teams, Howden has more recently expanded its space insurance capability with a focus on the broader risks facing businesses across the space industry.
Bonwick pointed to position, navigation and timing (PNT) systems, "basically GPS and alternative systems," as he put it, as the clearest example of a dependency that reaches well beyond businesses traditionally considered part of the space sector.
"Financial markets rely on it for timing transactions. Roads are managed by it. Trains are managed by it. Power stations use the timing chips to make sure the wind turbines are in sync," he said.
Those systems are already subject to disruption and interference, particularly around conflict zones, and a prolonged outage could affect businesses with no direct connection to the space industry. Yet the resulting loss can fall outside standard cover.
"That falls squarely within pretty much every infrastructure exclusion," Bonwick said. "If your business goes down because of failure of third-party infrastructure, which would be, in this case, the GPS signal, then it's not covered."
Many buyers do not understand the extent of that dependency in the first place, and even where a broker identifies it, available solutions can be limited by infrastructure, war and nuclear exclusions.
Cyber creates another gap. Bonwick said it is the "single biggest exclusion" in traditional space cover, with standard clauses removing cyber attacks from cover outright.
State-backed attacks complicate the picture further. Lloyd's has required managing agents to address state-backed cyber attacks in standalone cyber policies, an issue that has already prompted debate over how cyber warfare should be defined and attributed.
Bonwick cited the 2022 cyberattack on Viasat's satellite network, which coincided with Russia's invasion of Ukraine, as an example of the difficulty. He said he understood a cyber war exclusion to have been relevant, while stressing that this was market information rather than a fact he could independently confirm.
His broader concern is what happens as the line between cyberattack and warfare becomes harder to draw in a sector increasingly treated as strategically important infrastructure.
Bonwick estimates that just 3% to 4% of satellites in low Earth orbit carry insurance. But rather than simply indicating an opportunity to sell more cover, he said the figure should prompt questions about what operators actually need insured.
During an insurance panel at Space-Comm Expo earlier this year, Satellite Vu explained that it insured its first HotSat satellite to fund roughly three years of operations while a replacement was built, rather than simply to replace the satellite's value. Open Cosmos set out a different approach on the same panel, explaining that it can be cheaper to launch an extra satellite and build redundancy into the constellation than pay for insurance.
"When you're looking at a market where only 4% of people buy insurance at all, to try and ask questions to sell more of the same thing, I think you're kind of missing the point. You're probably insuring the wrong things," Bonwick said.
For operators running small constellations, Bonwick said the more significant tail risk can instead be a solar event affecting several satellites at once, or a supplier failure that causes a critical delivery deadline to be missed, pointing towards contingent business interruption and resilience planning rather than a bigger first-party limit.
Bonwick was speaking specifically about businesses within the space sector, rather than ordinary commercial accounts. But the GPS example takes the issue much further, raising the possibility that clients already depend on satellite infrastructure without that dependency ever entering the insurance conversation.
