Anomaly investigation clause

The anomaly investigation clause makes payment of a space insurance claim, whether for a launch or an in-orbit loss, conditional on a joint technical investigation by the insured, the manufacturer, the launch provider and the insurers, tasked with establishing the cause of failure before any payment is made. This step is not a formality: the technical cause often determines the amount that can be claimed, whether recourse exists against a liable third party, and whether cover applies to sister satellites of the same model if the failure reveals a batch defect. The investigation can involve months of telemetry review, simulation and engineering testimony, during which the insured bears the uncertainty over compensation for a potentially lost asset. For the insurer, the clause guards against a hasty settlement based on a poorly established cause, in a field where few losses provide a solid statistical base. It creates in turn a tension with the insured, eager to recover its loss, sharper still when the event is public and dramatic. The length of the investigation, how it is shared between the parties, and what happens to payment if the cause remains undetermined are central negotiating points of any major space policy.

The Falcon 9 explosion on its launch pad on September 1, 2016, destroying the Amos-6 satellite insured for roughly $200 million, triggered a technical investigation lasting several months before any payment was made, with the exact cause of the explosion remaining disputed.

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