In short: a satellite cannot be repossessed, so in a financing the insurance policy is the collateral that matters most if something goes wrong. Lenders need the policy to pay on the losses that actually happen, to pay to them, and to keep paying even if the operator breaches its terms. The space insurance market is small and has had heavy losses, so cover is expensive and the drafting is negotiated hard.
The two policies
| Policy | Period | What it covers |
|---|---|---|
| Launch (plus early operations) | From intentional ignition to a set period in orbit, often around a year | Launch failure, failure to reach the planned orbit, and failures found during in-orbit testing |
| In-orbit | Usually annual, renewed for the life of the loan | Loss of capacity or life during operation |
Launch cover is a large one-off premium, which is why it is often financed: Viasat's EXIM loan covers up to 85% of the launch and insurance costs of ViaSat-3 F1. In-orbit cover is cheaper but must be renewed every year, and the market may refuse it if a satellite has known problems.
The rest of this guide covers loss definitions and partial loss formulas, the exclusions lenders should check, constellation self-insurance and a drafting checklist. It is free with a work email, along with the register downloads and the in-house counsel tools.
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Questions
What does launch insurance cover?
Loss of or damage to the satellite from the launch itself and, usually, a first period in orbit, often around a year, covering failure to reach the right orbit or to work as specified. After that, operators buy annual in-orbit cover.
What is a constructive total loss of a satellite?
A loss treated as total even though the satellite still works in part, because its capacity or life has fallen below a threshold set in the policy. Partial losses below that threshold are paid in proportion to the capacity lost.
Do LEO constellations insure every satellite?
Often not. Operators of large constellations tend to self-insure in-orbit losses, relying on spare satellites and replacement launches. Lenders then focus on launch cover, spares and the constellation's ability to keep its service levels.
Sources
- Viasat Form 10-Q note: EXIM direct loan facility for ViaSat-3 F1 launch and insurance
- Eutelsat: export credit agency financing for OneWeb LEO satellites (February 2026)
General information on public law and market practice as at 28 Oct 2026, not legal advice on any transaction.