What insurance company lets a company take out a plan with that kind of risk?
Seems like NASA should've been getting insurance plans for the shuttle's External Tank all these years.
> "Orbcomm understood from the beginning that the orbit-raising maneuver was tentative," Nelson wrote. "They accepted that there was a high risk of their satellite remaining at the Dragon insertion orbit. SpaceX would not have agreed to fly their satellite otherwise, since this was not part of the core mission and there was a known, material risk of no altitude raise."
High risk, to me, says that there was a pretty good chance it was gonna fall.
> "Orbcomm had planned on reaching an altitude of 466 miles above Earth..."
> "Due to the engine shutdown, the Falcon 9 used slightly more fuel and oxygen to reach Dragon's intended 202 mile- (325-km) high orbit. Over the next 2.5 days, Dragon flew itself to the station's orbit 250 miles above Earth. It reached the $100 billion outpost, a project of 15 countries, on Wednesday."
Initial Dragon Orbit: 202 miles above Earth
ISS: 250 miles above Earth
Desired Satellite Location: 466 miles above Earth
There was only a 95% chance of the rocket reaching the location 466 miles above Earth (due to the reduced fuel reserves), so they didn't perform the burn, because NASA's contract with them forbade it (had to be >=99% chance of success).
The expected outcome (F9 upper stage doing the raising) was considered non-risky, and I'm sure that's the premise the insurance company was operating under when they agreed to insure the satellite.
Quoth the article:
> Falcon 9 had enough kerosene fuel left over to relight the engine, but the amount of liquid oxygen "was only enough to achieve a roughly 95 percent likelihood of completing the second burn, so Falcon 9 did not attempt a restart,"
I doubt many satellites have enough maneuvering fuel on-board to raise their orbit like that.
My point was more that, prior to the engine failure, raising the orbit with the second stage was considered non-risky. You're correct that after the failure, raising the orbit with the second stage was risky.
Besides polluting the relationship with SpaceX, raising a fuss would put their own plans into doubt. Orbcomm's stock price already fell 15% in the past week, I don't think they need more trouble:
http://finance.yahoo.com/echarts?s=ORBC+Interactive#symbol=o...;
So: The insurance company looks at the deal and sees that they have a 1 in 27 chance of having to pay out. Then they ask Orbcomm to pay $10,000,000/27 + profit. Statistically, the insurance company will always win if they make enough deals.
Oh, and I am sure that if NASA offered $1B to anyone who would insure the 50 million tank, there would be an army of takers. ;)
Either way they're still paying the premiums. I have a feeling, though, that the premiums will be going up after this.
There are very few insurance carriers on earth that write "specialized risk" like this -- it was most likely one of very few large multinational carriers or, more likely, a Lloyd's syndicate.
The problem is that these very same carriers are, somewhat ironically, exceedingly risk-averse. They pat themselves on the backs and tell each other how smart they are when their bets go well ("Ha! We got $2M in premium for that satellite launch and didn't have to pay out a penny") and they are very quick to play Monday Morning Quarterback when their bets go wrong, especially when it's the first launch ("Johnson, you are a foolish underwriter. How could you write that risk? Get off the risk immediately.")
As frustrating as it is, I wouldn't be surprised if they either cancelled the policy (if the policy covered multiple launches) or non-renewed after this failure and claim the risk profile changed or something like that.
It turns out Orbcomm has had large losses before -- they collected $44M on a $50M claim a couple of years ago (http://www.spacenews.com/archive/archive09/orbcomm_0518.html)
Another tidbit from the last article: the form of deductible on such a policy.
"Orbcomm [...] said the insurance policy covering the six satellites includes a one-satellite deductible, a condition Orbcomm filled early this year when one of the spacecraft suffered a power failure."
A one-satellite deductible. Love it.