Satellite underwriter Pembroke Managing Agency, a subsidiary of Bermuda-based insurer Ironshore International, has launched a series of new products designed to protect satellite operators, manufacturers and launch service providers from losses…
Satellite underwriter Pembroke Managing Agency, a subsidiary of Bermuda-based insurer Ironshore International, has launched a series of new products designed to protect satellite operators, manufacturers and launch service providers from losses associated with launch delays.
The six new contingent products will cover contractual liabilities and financial exposures that the parties incur through launch delays, rather than a physical loss or damage trigger that traditional satellite insurance covers.
For satellite operators, the cover would protect them from a loss caused to their commercial programme, such as lost lease payments, due to delays in the satellite being launched. The basis of the cover is ‘excusable delays’ arising under the launch service agreement and the satellite manufacturing contract.
Operators may also enhance this coverage to protect against the consequences of political risk, contract frustration, loss of export licence or delay caused by a co-passenger’s payload.
Under the launch service provider liquidated damages cover, the company would have protection over the contractual liability to pay damages to the satellite operator if the launch provider is responsible for a delay to the launch.
Similarly, for satellite manufacturers the insurance would cover the contractual liability to pay liquidated damages to the operator if the manufacturer was responsible for a launch delay.
For all of the products, the company will be required to retain part of the risk on a co-insurance basis.
Pembroke, which is a Lloyd’s managing agent, plans to underwrite this cover through a consortium structure arrangement with a capacity limit of around US$15-20m.
Commenting on the new products, Neil Stevens, director of the space division at Pembroke, told SatelliteFinance: “The innovative solutions we have launched have been well received by satellite operators, satellite manufacturers, launch service providers and lenders involved in satellite financing.
“The level of interest has exceeded our expectations. Launch delays have been a highly topical issue throughout 2014 and it is extremely satisfying to be at the forefront of providing genuine commercial solutions for the space sector.
“Each product is specifically crafted for the client. We analyse the contractual position and then provide a solution which wraps around the commercial exposures. If you have a commercial exposure and we don’t presently cover it, ask us about it. Our ‘can do’ approach is designed to provide real solutions.”
Last year, Ironshore and Pembroke launched a product that offers insurance coverage for lenders engaged in the financing of satellite projects.
The offering is designed to provide breach of warranty protection for banks and export credit agencies against the risk of non-disclosure and misrepresentation by borrowers in a satellite financing.
