To identify the territory of regulation and tax of a space risk, consider:
1. The nature of the cover provided;
2. The physical location of the property; and
3. The location of the insured’s business establishment(s).

Material damage
Consequential financial loss
Third party liability

Material damage

Material damage insurance covers physical damage to, or loss of, a space object during one of the four stages of its life cycle. Contracts may cover the object during its manufacture, pre-launch, launch and whilst it is in orbit. The insured may be a satellite manufacturer, satellite operator or a provider of launch services. Space objects are moveable property.

Most territories treat space objects as moveable property and the risk location is determined by the physical location of the object. However, for regulatory and tax purposes, EEA member states consider the risk location for launch and in orbit risks to be the territory in which the insured’s business establishment is located.  The location of risk for space objects in transit or temporary storage follow the rules respectively for goods in transit or normal storage risks. 

If the object is in orbit for the entire period of the insurance then the risk may not fall within any territory’s regulatory or tax regime.

Please note: In some territories, e.g. Canada and the US, the location of the insured’s residence or business establishment creates a risk location irrespective of the physical location of the insured property. Consequently, if the insured property is in a different territory from the insured’s residence or business establishment, there are two territories for regulation and tax.  

Consequential financial loss

Consequential financial loss insurance covers the service interruption, loss of profits, revenue or additional expenses that might be incurred if a space object cannot be used following material damage.

The risk location is the territory in which the insured’s business establishment is located.

Third party liability

Third party liability insurance covers the legal liabilities of the insured to third parties for bodily injury or property damage, when the space object is on the ground, during launch or in orbit.

The risk location is the territory in which the insured’s business establishment is located.

Definition of 'business establishment'

European Union (EU) legislation defines the term ‘establishment’. Outside the EU the term is not so well defined, so in the absence of any contradictory guidance, it is appropriate to follow the EU approach.

Examples of business establishments:

  • subsidiary companies 
  • branches of companies 
  • representative offices 
  • offices managed by businesses’ own staff 
  • tied selling agents 
  • factories and workshops 
  • mines and quarries 
  • oil and gas wells 
  • drilling platforms fixed to sea bed














Risk locator tool

Risk Locator | Establish the location of your risk

Frequently asked questions 

Introduction to Risk Location

What is risk location and why is it important ?

Introduction to risk location

Establishing the risk location

To help establish risk location please consider the questions provided via the link below

How to establish the risk location

Class of business guidance

To help you establish the risk location please consider the class of business

Class of business guidance 

Risk Location Examples

The interaction of different territorial rules can make a given scenario complex. Applying the principles set out will assist market participants in establishing the risk location.

Risk location examples

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