House Approves Extension of Third Party Liability Indemnification for Commercial Launch Companies

House Approves Extension of Third Party Liability Indemnification for Commercial Launch Companies

Today, the House passed H.R. 3819 that would extend for three years government indemnification for third party liability claims against commercial space launch companies. The existing indemnificaton expires on December 31 of this year.

The 1988 Commercial Space Launch Act Amendments first provided this indemnification, which means
the government will pay third party claims against commercial launch companies between $500 million and $2 billion. The companies must purchase insurance for amounts below $500 million and above $2 billion. Third party claims would arise, for example, if a launch vehicle exploded over Florida and killed or injured people on the ground. At the beginning of the commercial space launch era, requiring companies to purchase insurance against the full range of potential claims was considered a roadblock to facilitating the emergence of a commercial space launch industry. A parallel was drawn to government indemnification of nuclear power plants.

The commercial space launch indemnification usually is granted in 5-year intervals. The last time it was renewed was in the 2004 Commercial Space Launch Act Amendments (P.L. 108-492). That year the House initially voted to extend it for only three years, as it did today. The five-year extension was reached as a compromise with the Senate. Each time the issue is revisited, the question is raised as to whether commercial space launch companies are sufficiently healthy that they can now afford to buy insurance instead of getting government indemnification.

H.R. 3819 was introduced by Rep. Bart Gordon (D-TN) five days ago. There were no hearings. It was approved today by voice vote. The entire text of the bill is:


Section 70113(f) of title 49, United States Code, is amended by striking `December 31, 2009.’ and inserting `December 31, 2012.’.

The House Science and Technology Committee issued a press release after the vote.

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