UK Caps Launch Liability in Timely Boost for Nascent Domestic Market
•February 18, 2026
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Companies Mentioned
Why It Matters
The cap gives operators, insurers, and investors clear risk parameters, enhancing the UK’s appeal as a launch hub and narrowing its competitive gap with the United States and other spacefaring nations.
Key Takeaways
- •Liability cap set at €60 million, effective Feb 18
- •Cap replaces unlimited liability under 2018 Space Industry Act
- •Expected regulatory reforms may adjust cap later this year
- •Only Skyrora and RFA hold UK vertical launch licenses
- •Liability limit aims to attract investment and insurance capacity
Pulse Analysis
The introduction of a statutory liability ceiling marks a pivotal shift for the United Kingdom’s fledgling launch industry. By capping exposure at €60 million, the government addresses a long‑standing barrier that deterred both domestic and foreign operators, who previously faced unlimited financial risk under the 2018 Space Industry Act. This regulatory certainty aligns the UK with global norms, where entities such as the U.S. Federal Aviation Administration provide government‑backed coverage, thereby reducing the cost of private insurance and unlocking capital for new vehicle development.
Beyond risk mitigation, the liability cap is expected to stimulate ancillary markets, particularly aerospace insurance and venture financing. Insurers can now underwrite policies with defined maximums, improving pricing transparency and encouraging broader participation from the global finance community. For launch firms like Skyrora and Rocket Factory Augsburg, the cap removes a critical hurdle in securing launch licences and attracting downstream customers, potentially accelerating their maiden flights and fostering a more robust supply chain of launch services within the UK.
However, the cap is only the first step in a broader reform agenda. Recent setbacks, such as Orbex’s administration, underscore the sector’s fragility and the need for complementary measures—streamlined licensing, government‑backed guarantee schemes, and sustained investment in launch infrastructure. As policymakers contemplate adjustments to the €60 million limit and additional insurance reforms, the UK aims to reposition itself as a competitive, regulated hub for space launch activities, balancing innovation with fiscal responsibility.
UK caps launch liability in timely boost for nascent domestic market
TAMPA, Fla. — A long-awaited cap on liability for U.K. launch operators came into force Feb. 18, aiming to make the country’s fledgling rocket sector more competitive as it struggles to get off the ground.
The U.K. Space Industry (Indemnities) Act 2025 amends the Space Industry Act 2018, which until now exposed operators to unlimited liability for damage or loss caused by spaceflight activities from the country. The law now also requires launch licenses to specify a liability cap.
That cap is currently set at 60 million euros ($71 million), said Joanne Wheeler, managing partner at space‑law specialist Alden, although she said it is likely to change as part of broader regulatory reforms the government plans to implement this year.
The U.K. was previously one of the few spacefaring nations without a statutory liability limit covering all spaceflight activities, Wheeler said, putting the country “at a significant competitive disadvantage.”
In the United States, for instance, the government bears liability of about $3.1 billion, with any excess falling on the operator.
“As well as operators, it will provide insurers and the finance community with clarity and peace of mind,” Wheeler said.
Of a handful of companies planning to launch satellites from British soil, only U.K.-based Skyrora and Germany’s Rocket Factory Augsburg (RFA) hold vertical launch licenses from the Civil Aviation Authority, ahead of delayed maiden flights slated this year.
U.S.-based Virgin Orbit previously held a U.K. launch license and conducted horizontal launches from the country and the United States before collapsing into bankruptcy in 2023.
The liability reform comes as the U.K.’s domestic launch industry reels from the downfall of Scotland‑based venture Orbex, which kicked off plans to appoint administrators Feb. 11 after unsuccessful fundraising and sale efforts.
While a U.K. government spokesperson said the country remains committed to supporting its “dynamic space sector,” the latest setback has intensified scrutiny of the government’s broader space strategy.
The U.K. recently became the only country to reduce its contribution at the latest European Space Agency ministerial, and a cross‑party parliamentary committee warned in a November report that it risks falling behind international space competitors.
Wheeler said the liability cap is part of a broader package of regulatory and insurance reforms expected in the coming months to strengthen the U.K.’s competitiveness in the industry.
“The U.K. government is taking space seriously and its work should position the UK as a continued leader in space regulation and insurance,” she said.
“We have ground to make up internationally and this is a very positive start.”
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