[Code of Federal Regulations]
[Title 14, Volume 4]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 14CFR440.9]

[Page 874-875]
 
                     TITLE 14--AERONAUTICS AND SPACE
 
     CHAPTER III--COMMERCIAL SPACE TRANSPORTATION, FEDERAL AVIATION 
              ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 440_FINANCIAL RESPONSIBILITY--Table of Contents
 
Subpart A_Financial Responsibility for Licensed and Permitted Activities
 
Sec. 440.9  Insurance requirements for licensed or permitted activities.

    (a) As a condition of each license or permit, a licensee or 
permittee must comply with all insurance requirements of this section 
and of a license or permit issued by the FAA, or otherwise demonstrate 
the required amount of financial responsibility.
    (b) A licensee or permittee must obtain and maintain in effect a 
policy or policies of liability insurance, in an amount determined by 
the FAA under paragraph (c) of this section, that protects the following 
persons as additional insureds to the extent of their respective 
potential liabilities against covered claims by a third party for bodily 
injury or property damage resulting from a licensed or permitted 
activity:
    (1) The licensee or permittee, its customer, and their respective 
contractors and subcontractors, and the employees of each, involved in a 
licensed or permitted activity;
    (2) The United States, its agencies, and its contractors and 
subcontractors

[[Page 875]]

involved in a licensed or permitted activity; and
    (3) Government personnel.
    (c) The FAA will prescribe for each licensee or permittee the amount 
of insurance required to compensate the total of covered third-party 
claims for bodily injury or property damage resulting from a licensed or 
permitted activity in connection with any particular launch or reentry. 
A covered third-party claim includes a claim by the United States, its 
agencies, and its contractors and subcontractors for damage or loss to 
property other than property for which insurance is required under 
paragraph (d) of this section. The amount of insurance required is based 
upon the FAA's determination of maximum probable loss; however, it will 
not exceed the lesser of:
    (1) $500 million; or
    (2) The maximum liability insurance available on the world market at 
a reasonable cost, as determined by the FAA.
    (d) The licensee or permittee must obtain and maintain in effect a 
policy or policies of insurance, in an amount determined by the FAA 
under paragraph (e) of this section, that covers claims by the United 
States, its agencies, and its contractors and subcontractors involved in 
a licensed or permitted activity for property damage or loss resulting 
from a licensed or permitted activity. Property covered by this 
insurance must include all property owned, leased, or occupied by, or 
within the care, custody, or control of, the United States and its 
agencies, and its contractors and subcontractors involved in a licensed 
or permitted activity, at a Federal range facility. Insurance must 
protect the United States and its agencies, and its contractors and 
subcontractors involved in a licensed or permitted activity.
    (e) The FAA will prescribe for each licensee or permittee the amount 
of insurance required to compensate claims for property damage under 
paragraph (d) of this section resulting from a licensed or permitted 
activity in connection with any particular launch or reentry. The amount 
of insurance is based upon a determination of maximum probable loss; 
however, it will not exceed the lesser of:
    (1) $100 million; or
    (2) The maximum available on the world market at a reasonable cost, 
as determined by the FAA.
    (f) In lieu of a policy of insurance, a licensee or permittee may 
demonstrate financial responsibility in another manner meeting the terms 
and conditions for insurance of this part. The licensee or permittee 
must describe in detail the method proposed for demonstrating financial 
responsibility and how it ensures that the licensee or permittee is able 
to cover claims as required under this part.