SPACE INSURANCE- Neither in air law nor in space law has the contract of insurance been regulated

on an international level. Space insurance has, however, been available from private sources for a
number of years. Space insurance concerns especially communications satellites. The first satellite
insurance contract, written for Intelsat's 'Early Bird' in 1965, provided pre-launch coverage. Pre-launch
insurance will cover risks associated with the manufacturing and transport of satellites, but cover for
the launch itself is also available. The two forms may include the risk of loss or damage to the space
object and the risk of loss or damage to the on-board equipment. Regarding the insurance of
spacecraft I would like to observe the following: insurers play a very important role, reducing the
financial risk, which will make parties more willing to finance spacecraft. The problem is that companies
would like to see results first. There are three types of insurance: (1) pre-launch insurance; (2) launch
failure and initial operation insurance; and (3) insurance of the satellite itself. Regarding (1) Catalano
Sgrosso gives a very extensive comment, saying 'An insurance policy relevant to the pre-launch phase
provides the coverage of all the risks which could happen from the beginning of the realization of the
space programme right to the carrying out of the launch. It particularly refers to possible accidents
which may happen during the production of the satellite and of its systems and sub-systems, during
the phase of storage—which is rather long-lasting because of problems which can affect the
predisposition of the launch, during the phase of transportation of the satellite from the place of
production to the launch site and finally during the placing of the satellite on the launching
vehicle'.Dombek mentions an important development: 'Satellite manufacturers have also been forced
to assume risk in the context of insurance'. He states: 'Another risk that is now borne by satellite
manufacturers due to industry competitive pressures is unavailability of the selected launch vehicle.
Customers no longer want to assume the risk that a satellite upon which an entire business may
depend, is not operational by a set date. As a result, the industry has seen a move towards customers
taking delivery of the satellites in-orbit, thus forcing the manufacturer to be responsible for launch of
the satellite. In the event the selected launch vehicle is unavailable, the manufacturer is responsible for
having a back-up launch vehicle available to meet the contractual in-orbit delivery date'. As to (2): the
launch insurance covers the risk of a satellite not being placed in proper orbit, which can be originated
by several causes. The third form of insurance (3) covers the risk of satellite failure in orbit. This type of
insurance is generally arranged for a period of three years. It is of great importance that complete
information is provided by the company or owner to the lender or insurer because it is not possible for
them to know and to control all risks. Just as is the case regarding aircraft, inspection is important for
spacecraft as well. Insurance companies wrestle with satellite owners over issues of quality control as
satellites grow in complexity and numbers. With the increasing number of states developing satellites
especially for telecommunications, and with the increasing influence of private commercial activities,
financing of spacecraft has become a complicated issue. (1) Firstly, the state itself may finance the
space project. For instance, the Russian space station Mir was financed by the former Soviet Union.
(2) States may finance a space project by their cooperative endeavour, as is the case with the ISS. In
the construction of such a project, private companies could participate in production. (3) A private
company may construct a satellite through its own means, either because the necessary finance is
available, or because the private company is borrowing the money from a creditor with or without
security, e.g., by bank financing. In the insurance sector standard practice is that launching insurance
covers the risk of satellites not reaching their proper position in orbit. There is already some interesting
case law on the matter. (1) Intelsat v. Martin Marietta Corp. In August 1987, Martin Marietta had
contracted with Intelsat for the launch of two communications satellites on Titan III rockets. The first of
the two failed to reach the correct position in orbit, causing Intelsat substantial losses, including the
loss of a satellite. In the ensuing court case, Intelsat, following Martin Marietta's request for a
declaratory judgment on non-liability, counterclaimed, basing its claims on a) breach of contract; b) tort
(alleging negligence, gross negligence and negligent representation). In the contract between the
litigants were included the so-called 'crosswaiver' clauses on liability, amounting to each party bearing
its own risk. (In 1984 the CLSA, amended in 1988, had introduced rules on the allocation of liability in
tort among commercial space launch participants.) In its decision the District Court of Maryland, USA,
dismissed the tort claims. The 'waivers' in the contract were interpreted as excluding any liability for
negligence or gross negligence. The Court also ruled that Martin Marietta did not owe any other duty
than the obligations laid down in the contract: the contract imposed no duty on Martin Marietta to
exercise due care to avoid negligence; the outcome was that Intelsat could not recover its losses either
way. The Martin Marietta case is also interesting because the Court, by denying claims based on tort,
had in fact set aside the general rule, incorporated in most US states' legislations, that negligence is a
sound legal base for claims of damages. The decision reflects support for the purposes of the CSLA
and the Congressional backing for the commercial launch industry. This case may become an
important precedent. Yet another form of insurance covers the liability for potential damage to third
parties. Liability insurance policies do not provide coverage for unlimited amounts of money. It may be
recalled in this connection that the Liability Convention does not include a limit. Most characteristic for
the space insurance industry is that a single launch failure causes a great impact on the market. The
factors causing instability in the market are the following: large sums of money involved in a single
launch can dramatically affect the cash-flow position of the industry and the constantly evolving
technology makes risk assessment very difficult: even trivial faults can make space activities very
vulnerable. In addition, sending payloads with satellites which is common practice nowadays—entails
greater risk exposure for the insurance market. For all these reasons space insurance differs from
other insurance areas.
AVIATION INSURANCE- •In-Flight Insurance -This is a type of aviation insurance that covers a plane
for damages sustained while the plane is in motion. Other insurance policies do not necessarily cover
any damages sustained during motion and so it is very important to understand what this covers and
what it does not in order to determine if this type of policy will work for you. It is typically the most
expensive type of insurance since most accidents happen in the period that it covers. •Ground Risk
Hull (Non-Motion) Insurance-This type of insurance covers a plane for damages sustained while it is on
the ground but not in motion. This would include damages from crime, natural disasters, animals, and
uninsured aircraft occurring when the plane is grounded and not in motion.Some examples of potential
causes of damages covered by ground risk hull non-motion insurance are: •Vandalism
•Hail•Lightning•Theft•Animal damage•Damage from uninsured vehicles or aircrafts •Ground Risk Hull
(Motion) Insurance- This type of insurance is similar to GRH non-motion insurance except that it covers
damages sustained while the plane is on the ground and in motion. This typically includes damages
sustained during take off and taxi. •Public Liability Insurance- This type of coverage is usually
mandated by law in many places. It provides insurance for damages that occur to third-party entities
and property. Most places require that you demonstrate an ability to pay for damages that you cause
while operating a plane. This type of coverage does not pay for damage done to the plane or to
passengers in the plane. •Passenger Liability Insurance-This type of coverage can also be mandated
for certain types of pilots and planes and provides insurance for any passengers riding in the plane
while the policy holder is operating it. Passenger liability insurance provides money for injuries and
final expenses in the event of a fatality. •Combined Single Limit- Combined single limit (CSL) coverage
is a bundled policy that includes both public liability and passenger liability insurance. This type of
coverage has a set limit per payout per accident.
• 12. Offices of Executive Council of Insurers and Insurance Ombudsman. —(1) The IRDAI shall
make available to the Insurance Ombudsman such secretarial staff as may be determinedby the
Executive Council of Insurers.(2) The salary, allowances and perquisites payable to the staff of the
Insurance Ombudsman secretariat and allexpenses incurred in connection with administration,
including expenses to be incurred by the ExecutiveCouncil of Insurers, fees of professional experts
engaged under sub-rule (3) of rule 15 and expenses towardsAdvisory committee constituted under rule
19 shall be borne by the Life Insurance Council and the Generalinsurance Council in such proportion
as the Executive Council of Insurers may, by a general or special orderspecify, from time to time, in
this behalf.(3) The Insurance Ombudsman shall submit its annual budget requirements for the ensuing
financial year bythe 31st January every year to the Executive Council of Insurers and the Executive
Council of Insurers shall,after finalising the budget in consultation with the Ombudsman,, advise the
Life Insurance Council and the General Insurance Council to allocate to it the funds including funds for
the budgeted expenses of theExecutive Council of Insurers, and the Executive Council of Insurers
shall in turn allocate funds to the respective offices of the Insurance Ombudsman. (4) The decision of
the Executive Council of Insurers on allocation of fund to an office of Insurance Ombudsman shall be
final. •13. Duties and functions of Insurance Ombudsman. — (1) The Ombudsman shall receive
and consider complaints or disputes relating to— (a) delay in settlement of claims, beyond the time
specified in the regulations, framed under the Insurance Regulatory and Development Authority of
India Act, 1999; (b) any partial or total repudiation of claims by the life insurer, General insurer or the
health insurer ; (c) disputes over premium paid or payable in terms of insurance policy; (d)
misrepresentation of policy terms and conditions at any time in the policy document or policy contract;
(e) legal construction of insurance policies in so far as the dispute relates to claim; (f) policy servicing
related grievances against insurers and their agents and intermediaries; (g) issuance of life insurance
policy, general insurance policy including health insurance policy which is not in conformity with the
proposal form submitted by the proposer; (h) non-issuance of insurance policy after receipt of premium
in life insurance and general insurance including health insurance; and (i) any other matter resulting
from the violation of provisions of the Insurance Act, 1938 or the regulations, circulars, guidelines or
instructions issued by the IRDAI from time to time or the terms and conditions of the policy contract, in
so far as they relate to issues mentioned at clauses (a) to (f) . (2) The Ombudsman shall act as
counsellor and mediator relating to matters specified in sub-rule (1) provided there is written consent of
the parties to the dispute. (3) The Ombudsman shall be precluded from handling any matter if he is an
interested party or having conflict of interest. (4) The Central Government or as the case may be, the
IRDAI may, at any time refer any complaint or dispute relating to insurance matters specified in sub-
rule (1), to the Insurance Ombudsman and such complaint or dispute shall be entertained by the
Insurance Ombudsman and be dealt with as if it is a complaint made under rule 14. •14. Manner in
which complaint to be made. — (1) Any person who has a grievance against an insurer, may himself
or through his legal heirs, nominee or assignee, make a complaint in writing to the Insurance
Ombudsman within whose territorial jurisdiction the branch or office of the insurer complained against
or the residential address or place of residence of the complainant is located. (2) The complaint shall
be in writing, duly signed by the complainant or through his legal heirs, nominee or assignee and shall
state clearly the name and address of the complainant, the name of the branch or office of the insurer
against whom the complaint is made, the facts giving rise to the complaint, supported by documents,
the nature and extent of the loss caused to the complainant and the relief sought from the Insurance
Ombudsman. (3) No complaint to the Insurance Ombudsman shall lie unless— (a) the complainant
makes a written representation to the insurer named in the complaint and— (i) either the insurer had
rejected the complaint; or (ii) the complainant had not received any reply within a period of one month
after the insurer received his representation; or (iii) the complainant is not satisfied with the reply given
to him by the insurer; (b) The complaint is made within one year— (i) after the order of the insurer
rejecting the representation is received; or (ii) after receipt of decision of the insurer which is not to the
satisfaction of the complainant; (iii) after expiry of a period of one month from the date of sending the
written representation to the insurer if the insurer named fails to furnish reply to the complainant . (4)
The Ombudsman shall be empowered to condone the delay in such cases as he may consider
necessary, after calling for objections of the insurer against the proposed condonation and after
recording reasons for condoning the delay and in case the delay is condoned, the date of condonation
of delay shall be deemed to be the date of filing of the complaint, for further proceedings under these
rules. (5) No complaint before the Insurance Ombudsman shall be maintainable on the same subject
matter on which proceedings are pending before or disposed of by any court or consumer forum or
arbitrator. 15. Insurance Ombudsman to act fairly and equitably. — (1) The Ombudsman may, if
he deems fit, allow the complainant to adopt a procedure other than under sub- rule (1) or sub-rule (2)
of rule 14 for making a complaint, after notifying the parties to the dispute. (2) The Ombudsman shall
have the power to ask the parties concerned for additional documents in support of their respective
contentions and wherever considered necessary, collect factual information relating to the dispute
available with the insurer and may make available such information to the parties concerned. (3) The
Ombudsman may obtain the opinion of professional experts, if the disposal of a case warrants it. (4)
The Ombudsman shall dispose of a complaint after giving the parties to the dispute a reasonable
opportunity of being heard. 16. Recommendations made by the Insurance Ombudsman. — (1)
Where a complaint is settled through mediation, the Ombudsman shall make a recommendation which
it thinks fair in the circumstances of the case, within one month of the date of receipt of mutual written
consent for such mediation and the copies of the recommendation shall be sent to the complainant and
the insurer concerned. (2) If the recommendation of the Ombudsman is acceptable to the complainant,
he shall send a communication in writing within fifteen days of receipt of the recommendation, stating
clearly that he accepts the settlement as full and final. (3) The Ombudsman shall send to the insurer, a
copy of its recommendation, along with the acceptance letter received from the complainant and the
insurer shall, thereupon, comply with the terms of the recommendation immediately but not later than
fifteen days of the receipt of such recommendation, and inform the Ombudsman of its compliance.