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Most commercial satellites are insured in case something bad happens on launch. Although the Ariane 5 is a fairly reliable rocket, a launch failure is not out of the question.

While other questions have said that if the JWST fails to deploy it's basically SOL ("Sadly Out of Luck") and I would assume uninsurable, rocket launches are regularly insured. Is the JWST insured against the failure of the Ariane 5?

For more info see:

Dan Eldridge
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Rob Rose
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  • You buy insurance because a loss would cause you financial hardship. Companies insure satellite launches because to most, they're a major investment. Webb telescope cost 10 billion over a decade or so, US annual budget 3.8 trillion. So annual cost (not even figuring most of it is engineering R&D, if you're building a replacement) is somethin like 0.03% of the US budget. – jamesqf Feb 01 '18 at 19:26
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    @jamesqf True but realistically Congress isn't going to fund a second attempt. – Rob Rose Feb 01 '18 at 19:45
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    Why would a publicly funded organization care? Just taxpayer money... – Wyrmwood Feb 01 '18 at 20:14
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    @Wyrmwood because they want the valuable science and know they likely won't get funding for it again? – Rob Rose Feb 01 '18 at 20:57
  • They'll just use NASA math, like reporting a cost of 450M per launch, when they actually spent 1.5B per launch... – Wyrmwood Feb 01 '18 at 21:04
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    @Wyrmwood That's not deceptive math. Those two values have different meanings. The latter divides out the total cost of the entire Shuttle program over the number of launches, the former is the estimated cost merely to launch a Shuttle (not including the non-recurring costs necessary to support the infrastructure of the Shuttle program). – called2voyage Feb 01 '18 at 21:26
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    @Wyrmwood Also, 1.5B is still a drop in the bucket--see jamesqf's comment above. – called2voyage Feb 01 '18 at 21:27
  • It's an interesting point that things going to orbit are frequently insured; but it would seem that nothing going beyond orbit has ever been insured. – Fattie Feb 02 '18 at 01:05
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    To add to @jamesqf's comment on the cost of the JWST, I'd expect probably over 90% of its cost resides in its blueprints, with a relatively small portion represented by the actual manufacturing of the instrument. If it exploded on launch, it wouldn't double the cost of the program to build another one. Additionally, I'd expect commercial satellites, which usually aren't scientific instruments, to not have an extreme ratio between design and manufacturing. – whatsisname Feb 02 '18 at 04:10
  • @whatsisname That's part of what I'm getting at. I doubt rebuilding it would be nearly as expensive. – Rob Rose Feb 18 '18 at 02:28

2 Answers2

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NASA tends not to insure its missions, nor do any government missions. These missions are one-of-a-kind, and so expensive that the satellite insurance market would have a hard time making it work. They simply triple-check everything they can, and expect to lose a few missions, so called "Self-insurance". They have considered insuring things like the ISS before, but it's never worked out.

Just to give you an idea, the cost of insurance is about 10-15% of the insurance amount for the space market. The success rate of Space Shuttle launches was 99%. Since 2000, there has been 19 successful NASA interplanetary mission launches, and 1 failure (CONTOUR).

Basically, it would cost NASA more to insure the missions then the benefit it would gain from insurance, and thus they have chosen not to insure their missions.

Furthermore, the requirements tend to change for missions over time. It might take another 4 years to re-build the spacecraft, and another year or two waiting for the right opportunity to launch. In that length of time, things will have changed considerably.

Uzair A.
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PearsonArtPhoto
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  • That seems awfully risky. Though I would think the rebuild cost would be considerably less than the original design cost. I'll hold off on accepting your answer for a couple days in case anyone has information specific to the mission itself. – Rob Rose Feb 01 '18 at 16:47
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    @RobRose With the turnaround time on most of these missions, by the time it has failed, it has usually been so long you don't want to repeat the same mission. – called2voyage Feb 01 '18 at 16:54
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    If a lot of missions are done, self-insurance will be cheaper. Of course everything of the mission should be done very carefully. – Uwe Feb 01 '18 at 16:58
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    NASA doesn't know how to do missions that aren't done very carefully. They do occasionally make mistakes, but not that many... – PearsonArtPhoto Feb 01 '18 at 17:02
  • @PearsonArtPhoto This would be a failure with the rocket though, not the mission. I'm mainly talking about failure upon launch. – Rob Rose Feb 01 '18 at 17:36
  • CONTOUR was a failure during launch. Most commercial missions are actually insured for launch and slightly thereafter, in part because it can be difficult to tell a rocket failure from a satellite dead on launch. – PearsonArtPhoto Feb 01 '18 at 17:40
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    @RobRose The risky part is putting spacecraft that cost multiple billions and took person centuries of work (and whose successful launch is critical to many people's careers) on top of a giant firework. However, that risk is unavoidable. Buying insurance vs "self-insurance" is a bookkeeping decision, it doesn't reduce the risk at all. – djr Feb 01 '18 at 19:42
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    I would add that NASA is not a for-profit corporation. They don't expect to make a profit from JWST, Hubble, the ISS, a mars rover, etc. The reason you insure a satellite is to recover your lost investment so you can then decide to a) try again or b) do something else. NASA doesn't work that way because they are part of the US government with a budget set by congress. Much more important is the prestige they gain from launches. A successful launch, they keep their budget. A failure, heads roll. There is no insurance to protect the prestige lost in a failure – gillonba Feb 01 '18 at 22:42
  • @RobRose If you're doing something enough times such that your actual average losses approach the overall average loss, then insurance is always a loosing proposition, on average. That's the way insurance works. If it didn't, then insurance companies would go bankrupt. Insurance companies make a profit of how much more they charge above what the actual losses will be (plus overhead, plus time value of money). Thus, if you can handle a periodic huge loss, then, on average, those huge losses will be less than the insurance payments you would have made. – Makyen Feb 02 '18 at 04:57
  • Insurance under these conditions is very different than a consumer purchasing insurance to cover a risk for which they are unlikely to experience the statistical average loss. For the consumer, you're paying insurance just in case you experience a low probability event. – Makyen Feb 02 '18 at 04:58
  • The mirror of the Hubble telescope could have been almost perfect when manufactured and tested with more care. It is not easy to avoid both too much and too few care. – Uwe Feb 02 '18 at 19:44
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    @rotard From the money what NASA gets in case of a failure, they could build another telescope and get the prestige back. – peterh May 26 '18 at 00:57
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Insurance is done when losing a mission would mean an unacceptable financial loss, e.g. when a launch failure would bankrupt your company. The government is large enough to absorb such losses, so no insurance is necessary.

Hobbes
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  • There's an interesting parallel in automotive insurance (USA). In states that require proof of insurance to drive; if you, on a yearly basis, have over X dollars saved away (usually X is > $100,000) you can be 'self-insured' for automotive accidents with proof provided and verified by the BMV. This must be updated yearly to prove you still have the required amount saved. Same idea though, wealthy individuals can take a hit instead of shelling out money for something that may or may not happen, then be extra careful. – Magic Octopus Urn Jul 11 '18 at 20:30
  • but NASA does not equal government. Let's say NASA gets about 0.5% of government budget yearly. If they for example botched half of it on failed missions, they would not get 0.75% of government budget next year to compensate for lost missions. If anything, they would likely get less than 0.5% next year... – Matija Nalis Feb 19 '21 at 16:07