The United States Government Accountability Office (GAO) has issued a report into whether the US Government should continue to provide indemnification for third-party losses under the Commercial Space Launch Act Amendments of 1988 (CSLA) . The current agreement, where the US Government provides an additional $2.7 billion in coverage, over and above a per-launch insurance that is required by the FAA will run out unless the US Congress reauthorizes after December 2012.
Under the correct system, the launch company arranges the first tier of insurance, which is capped at $500 million, with the actual amount required set by the FAA and is calculated based on a statistical approach to the estimated losses and likelihoods of a catastrophic accident.
The US Government then provides a second tier of indemnity, originally set at $1.5 billion, but since inflation adjusted to the current figure of $2.7 billion for any third-party claims above the first tier.
A final third tier, which is not compulsory, can then be arranged by the launch company for claims above the combined first and second tiers.
All of which makes even minicab and taxi insurance cheap!
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