Putting private vehicles into space is a costly proposition. And that’s when everything goes according to plan.
On Thursday it didn’t. A rocket built by Silicon Valley billionaire Elon Musk’s SpaceX went up in flames on a Florida launchpad. Thankfully, no one was aboard and the incident caused no injuries.
But the hit to SpaceX’s bottom line could be serious. While space travel accidents aren’t uncommon, the mishap—which is not the company’s first—will mean delays and a loss of public confidence for the fledgling enterprise.
There is also the matter of the Falcon 9 rocket.
As it happens, you can insure a rocket. Large insurers including American International Group, Munich Re, Swiss Re, and Allianz all offer policies, according to Bloomberg. In 2012, for example, insurers collected roughly $800 million in space launch insurance premiums, and payed out about $600 million to cover 2011 losses.
According to the Bloomberg report, however, Musk’s company didn’t buy this kind of insurance.
Big mistake? It can seem so with 20-20 hindsight. But it’s hard to know for sure without knowing the details of the policies it was offered.
Indeed, the SpaceX rocket carried an Amos 6 satellite built by a different company, a unit of an Israeli company called Space Communications. (The satellite was slated to be used by Facebook to help offer Internet service in Africa.) Space Communications did insure its satellite, to the tune of nearly $300 million.
But it, too, may be in the hole.
Even space insurance, it turns out, comes with fine print.
At least one insurance broker speculated to Bloomberg that the Space Communications policy may not have been triggered: Such policies typically cover mishaps only during a rocket launch, while the SpaceX rocket exploded during preparations for a test two days before the scheduled lift-off.