11 August 2026
Regulatory developments in the space race
What it means for your risks and insurance
Key insights
- UK licensing processes are being updated, but expectations and timelines are still settling.
- Sustainability is becoming a standard expectation, with regulators requiring compliant end-of-life (EOL) plans.
- Requirements for licensees to carry third-party liability (TPL) insurance vary by jurisdiction and mission phase. In-orbit liability insurance is only mandated in a few select jurisdictions, including the UK.
UK space regulation has just had an overhaul. At the end of last year, the government passed an important new law that limits the maximum legal liability on commercial spaceflight operators.
The Space Industry (Indemnities) Act 2025 means that, for the first time, anyone planning to launch from British soil will not face unlimited liability to the state if their satellite causes any property or bodily injury damage to third parties once launched.
This new law brings the UK into line with established international practice, where governments share the risks by limiting an operator’s liability or through a state guarantee, such as in the US or France. The UK continues to require UK-domiciled operators to buy in-orbit liability insurance.
"Regulations are constantly evolving, especially for the emerging ‘new space’ sector. For example, in the UK, efforts are underway to revamp the current framework for obtaining launch licenses, which is still based on regulations from the 1970s."
Charlotte King, Account Associate - Space at Gallagher Specialty.
However, regulatory frameworks remain uneven, with approaches often driven by domestic factors and policy, and, in some places, outdated. As the space race intensifies, it’s essential to understand the regulations governing the sector.
A rapidly scaling space market
The UK’s space industry has grown at around 3.3% a year, in real terms, since 2010 and has become a significant contributor to economic growth. According to research commissioned by the UK Space Agency (UKSA), sectors that rely on satellite services represented around 18% of total UK GDP in 2023.
According to previous UKSA research[ii], the UK accounts for about 5% of the global space economy. McKinsey, the global consulting firm, estimated the size of that global space sector at USD630 billion as of the end of 2023, and projects it could hit USD1.2 trillion by 2030.
Higher launch frequency and the growing role of private capital have accelerated the shift from episodic, state-led space missions to more frequent commercial operations.
Over the past decade, the US Federal Aviation Administration (FAA) has recorded a 900% growth in the number of commercial operations. The regulator licensed a record 148 launches and re-entries in 2024, up from 14 in 2015, and forecasts continued growth over the coming decade.
Sustainability has become a systemic concern
Sustainability considerations are increasingly influencing regulatory decision-making. There’s a growing quantity of debris in orbit, such as defunct satellites or spent rocket stages, and the Organisation for Economic Co-operation and Development (OECD) has noted that this could significantly increase collision risk and long-term economic costs, particularly in low Earth orbit (LEO).
As orbital congestion rises, debris mitigation and end-of-life (EOL) planning are receiving earlier and more detailed scrutiny within licensing and approval processes.
Under the Space Industry Act 2018, sustainability requirements have been embedded into UK regulators’ licensing requirements for the first time. Operators are now expected to submit credible EOL plans, whether controlled re-entry, graveyard orbit placement or burn-up strategies, before approval is granted.
For operators and insurers, this means that mission design, disposal strategy and operational discipline are now more closely connected to regulatory confidence, approval timelines and long-term insurability.
Sustainability in space: Who’s affected and how
- Launch providers and spaceports: Growing scrutiny of environmental impacts around spaceport locations is likely to be a bigger part of licensing processes.
- Satellite owners and in-orbit service providers: EOL and debris-mitigation commitments will likely become operational requirements. Insurance underwriters will look for clear timelines and failure-mode planning.
- Human spaceflight and tourism ventures: Regulatory standards for private participants are likely to tighten as activity increases.
- Start-ups and scale-ups: Variable licensing timelines and evolving evidence standards may increase operational complexity.
Regulations that are changing in practice
In the UK, reform has been driven by concerns about competitiveness. The Space Regulatory Review 2024] acknowledged that uncertainty and delays in licensing have risked deterring investment and pushing activity to other jurisdictions. To tackle this, it has provided guidelines which prioritise agility, clarity and sustainability, with the goal of positioning the UK as an attractive jurisdiction for commercial space operations.
The Regulatory Review also made clear the government’s support for what became the Space Industry (Indemnities) Act 2025, which has now made liability caps mandatory for all launch operator licences. This will lead to greater certainty for insurers, as it helps turn an open-ended sovereign risk problem into a quantifiable, insurable exposure.
Meanwhile, the government has also decided to merge the UK Space Agency (UKSA) into the Department for Science, Innovation and Technology (DSIT) by April 2026, in a move intended to cut red tape and provide coordinated support to the industry. It published the plans alongside new measures intended to encourage a type of space mission known as rendezvous and proximity operations (RPOs), which it said were a ‘prime example of the kind of joined-up thinking that will benefit’ from the merger.
In the US, regulatory change has focused on scalability. The FAA has consolidated launch and re-entry licensing under a single, performance-based framework (14 CFR Part 450), replacing a patchwork of vehicle-specific rules.
Meanwhile, the Federal Communications Commission (FCC) adopted a new rule in 2022 to combat the rising risk of orbital debris, reducing the allowed time for post-mission disposal from 25 years to five years. Often referred to as the ‘5-Year Rule’, this requirement applies to US-licensed satellites and foreign-licensed satellites seeking US market access.
This means operators must ensure their LEO satellites re-enter the atmosphere (or are otherwise disposed of) as soon as practicable, but no later than five years after the completion of their mission.
These kinds of changes place greater responsibility on operators to demonstrate safety and risk controls, factors that increasingly influence insurability and underwriting appetite.
Implications for risk and insurance
There’s no global requirement to purchase in-orbit liability insurance; some countries may mandate it (such as the UK and Greece, which mandates satellite owners to procure in-orbit third-party liability (TPL) cover), but the US, for example, doesn’t. This can complicate the picture for those wishing to operate cross-border satellite constellations or run multi-country missions.
At the same time, the commercial space sector (particularly in the US) is dominated by a small number of well-capitalised operators, who often elect to self insure their satellites for launch and subsequent in-orbit operations unless required to do so, retaining the risk on their substantial balance sheets. This is an advantage that smaller space startups and emerging ventures don’t have, and it also influences insurer appetite and pricing.
Insurance capacity for crewed activity is limited, and underwriters will naturally concentrate on the robustness of safety cases, abort/return strategies and contractual arrangements among parties.
"This is where much of the regulation around insurance comes into play, it varies significantly from country to country. Whether a satellite operator or a launch vehicle operator needs to purchase TPL insurance depends on the location."
Charlotte King, Account Associate - Space at Gallagher Specialty.
Preparing for tomorrow
As the number of launches increases, regulatory attention is expected to remain focused on licensing and a gradual tightening of EOL practices over the next six to 12 months.
“I foresee a lot of attention being directed toward launch licenses, spaceport licenses and the regulations needed to protect nature around local areas,” adds Charlotte King.
Understanding how liability regimes interact across borders and building credible EOL strategies from the outset will help during regulatory submissions.
“Engage early and be aware,” King adds. “Understand the regulations you need to have in place, because otherwise, you might be caught off guard in the end.”
Against this backdrop, a proactive, well-evidenced approach to regulation is increasingly important. Gallagher Specialty's Aerospace team works closely with regulators and underwriters across the UK and the US to help clients:
- Interpret evolving requirements.
- Align insurance evidence with licensing conditions.
- Structure contractual arrangements that reflect statutory liability and current market practice.
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