Israel Aerospace Industries Files a $62 Million Lawsuit Against AMOS-6 Insurers

State-owned company Israel Aerospace Industries Ltd. (IAI) filed a $62 million lawsuit on Sunday against the insurers of its satellite AMOS-6, which was destroyed in 2016 in Florida during pre-checks, when its carrier SpaceX Falcon 9 exploded on its launch pad.

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The satellite was insured by a group of insurance companies, including U.K-based Lloyd's of London and Marsh Ltd., as well as Israel-based Peltours Insurance Agencies Ltd. According to the lawsuit AMOS-6 was covered by a “full risk” insurance policy totaling $236 million and EUR 43.1 million. The insurers have paid IAI approximately $215 million to date, but the company claims it deserves some $62 million more.

According to the lawsuit, the insurance group is refusing to pay the full amount, contending that no notice was given by IAI concerning a change in the planned experiments. Since the changes increased the risk to the satellite, the group claims they would have charged a heftier premium, had they been notified.

In the lawsuit, IAI claims that it had informed the insurers of all changes in advance and that AMOS-6’s policy covered any damage to the satellite under any circumstances. It also added that the explosion occurred before the experiment began, during fueling, which is specifically covered by the policy.

Last week, an Israeli parliamentary subcommittee on space found that the Israeli satellite industry has yet to recover from the destruction of AMOS-6, which caused a chain reaction that is now threatening the completion of the country’s latest satellite, AMOS-8, scheduled to launch in 2021.

AMOS-6’s destruction has cost its operator, Space Communication Ltd., also known as Spacecom, a $95 million five-year leasing contract with Facebook as well as a $285 million deal for its acquisition by Shanghai-listed telecommunication technologies company Beijing Xinwei Technology Group Ltd. Spacecom was also forced to lease another satellite, renamed AMOS-7, at a cost of $22 million a year, making the compensation it received for AMOS-6 lacking and leaving the company unable to finance AMOS-8.