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Virgin Galactic crash expected to cost insurers $40M-$50M

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The fatal crash of the Virgin Galactic SpaceShipTwo spacecraft late last week will cause an insurance loss of between $40 million and $50 million.

Coverage for the craft was placed by London-based Jardine Lloyd Thompson Group P.L.C. and led by American International Group Inc., sources said.

The craft is insured in the airline insurance market rather than the space insurance market, sources said.

“We act on behalf of Virgin Galactic and are providing every assistance as is appropriate in these tragic circumstances,” JLT said in a statement Tuesday. “Our thoughts are with the family and colleagues of the pilot who lost his life and for the injured pilot,” it added.

The U.S. National Transportation Safety Board is investigating the cause of the crash, which took place during a test flight Friday above the Mojave desert in California.

The craft, which was part of a Virgin Galactic program that aims to roll out commercial passenger space flights next year, broke apart, killing co-pilot Michael Alsbury.

Pilot Peter Siebold parachuted clear but was seriously injured.

Last Tuesday, an unmanned rocket exploded on the launch pad at NASA's Wallops Island flight facility in Virginia.

The Antares rocket, built and launched by Orbital Sciences Corp., was carrying supplies to the International Space Station.

That loss is expected to result in an insurance claim of between $40 million and $50 million, sources said.

Willis Group Holdings P.L.C. was the broker for the coverage.