Comments on: Doubting indemnification

By: Dark Blue Nine

Dark Blue Nine — Wed, 28 Mar 2012 17:28:58 +0000

“If this was truly a ‘commercial’ enterprise, gains and losses would be privatized.”

Private entities, launch insurers and the companies themselves, are responsible for the losses. But the energies, and thus maximum probable losses, involved in space transport are an order of magnitude greater than they are in aviation. This puts the higher-end liabilities outside the capability of the private sector to insure or absorb.

“The money to support a fully-functioning commercial economy in space just isnâ€™t there yet.”

This has little to do with how big the industry is, dollar-wise. It’s a function of the physics involved.

By: Rand Simberg

Rand Simberg — Wed, 28 Mar 2012 17:12:31 +0000

International law (and insurance) are much different for commercial aviation, passenger and cargo, where the airline and its insurers are held responsible for a crash into the aforementioned cruise ship, with maybe Boeing or Airbus thrown in for grins.

There is a reason for this. You might want to look up something called the Outer Space Treaty, and the Liability Convention.

By: MindlessEavesdropper

MindlessEavesdropper — Wed, 28 Mar 2012 15:29:01 +0000

This amounts to privatizing gains while socializing losses, a lose-lose for the taxpayer. International law (and insurance) are much different for commercial aviation, passenger and cargo, where the airline and its insurers are held responsible for a crash into the aforementioned cruise ship, with maybe Boeing or Airbus thrown in for grins. If this was truly a “commercial” enterprise, gains and losses would be privatized. As it is, we’re just looking at state-sponsored capitalism, which isn’t capitalism, as I understand it. The money to support a fully-functioning commercial economy in space just isn’t there yet.

By: BeanCounterfromDownunder

BeanCounterfromDownunder — Wed, 28 Mar 2012 01:35:31 +0000

Hardly surprising. How many politicians really understand the issues that they’re supposed to be legislating or even debating?!

By: Rand Simberg

Rand Simberg — Tue, 27 Mar 2012 16:14:07 +0000

I doubt that Edwards understands the relevant issues at all. Certainly there’s no evidence that she does from anything she said.

By: Dark Blue Nine

Dark Blue Nine — Tue, 27 Mar 2012 12:58:44 +0000

Under the Outer Space Treaty, nations bear responsibility for damages caused by launches under their jurisdiction. If a Boeing, LockMart, OSC, or SpaceX upper stage falls on a cruise ship in international waters and kills hundreds, the U.S. government is going to be on the hook for the damages above what the launch was insured for and what the launch company can sustain, regardless of whether there’s an indemnification clause in existing legislation or not. It makes little sense not to provide this protection for domestic third parties, when it’s required for foreign third parties. It would be a bad double standard if the families of the Canadian tourists on the cruise ship example above are made whole and the families of the U.S. tourists are not.

There’s also the practical issue of how much capital is available within the insurance industry to cover these launches. Without indemnification, segments of the insurance industry could be bankrupted, regardless of whether we care about the liable launch company or not.

I’d also note that the U.S. government routinely provides indemnification over longer time periods for other industries, such as the Price-Anderson Nuclear Indemnification Act.