FAA launch maximum probable loss (MPL)
The amount the Federal Aviation Administration calculates for each US launch license, up to which the operator must insure against third-party claims.
Unlimited third-party liability would make a launch uninsurable, since no market covers a limit that does not exist. US law addresses the problem in three tiers. For each license, the agency calculates the maximum probable loss the launch could cause to third parties and to federal property, and the operator must insure up to that amount, subject to a statutory cap. Above that, the federal government may pay claims up to a second cap, subject to an appropriation by Congress, and the operator is again solely liable beyond it. The MPL calculation is therefore both an insurance amount and the boundary between the market and the public backstop, which is why it is argued over for every new launch vehicle.
The 1988 amendments to the Commercial Space Launch Act cap the required insurance at 500 million dollars for third parties and 100 million for federal property; above that, the federal government may cover up to 1.5 billion 1988 dollars, adjusted for inflation, which is more than 3 billion today.
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