Space Companies Can Also Join Defense Industry Mutual Aid Association, Easing Guarantee and Insurance Costs

Membership expanded to private aerospace companies under revised Defense Industry Development Act
From contract and export guarantees to coverage for facilities and equipment... strengthening support for small and midsize companies

Private aerospace companies can now join the Defense Industry Mutual Aid Association and use guarantee and mutual aid services needed to carry out projects and export products. As financial support previously offered mainly to defense companies expands to the aerospace sector, it is expected to help ease the burden on small and midsize space companies with limited funding and staffing.

The Korea Aerospace Administration (KASA) said on October 15 that it had held a “Space Insurance Policy Briefing” for aerospace companies at Centropolis in Jongno-gu, Seoul. The event was held to explain a newly introduced system under the revised Act on the Development and Support of the Defense Industry, which took effect on October 8, and help companies make use of it.

File photo to help readers understand the article. A Nara Space engineer checks satellite activity at the satellite control center. Photo by Kim Jonghwa.

Under the legal revision, private aerospace companies that meet certain requirements can now join the Defense Industry Mutual Aid Association. The association, which has provided guarantee and mutual aid services needed by defense companies to carry out their projects, has expanded its scope of operations to include the aerospace sector.

Member companies can use guarantee services required to fulfill project contracts and export products. They can also access mutual aid services to protect against damage to facilities and equipment, as well as liability for damages. A guarantee covers risks such as failure to fulfill a contract, while mutual aid is an insurance-like system that compensates for losses resulting from accidents.

The Defense Industry Mutual Aid Association touts lower guarantee and mutual aid fees than other guarantee institutions, as well as prompt payment of mutual aid claims. It also provides support with interest payments and legal matters to small and midsize companies.

In particular, companies that operate in both the defense and aerospace sectors previously had to use separate guarantee services for each business area. The improved system is expected to reduce the inconvenience of related procedures.

The briefing covered the association’s membership requirements and application procedures, services available to aerospace companies, and support programs for small and midsize companies. A question-and-answer session was also held to address questions from company representatives about the actual membership and service-use processes.

KASA plans to continue working with the Defense Industry Mutual Aid Association to help companies use the new system in their business operations and to expand the support framework by gathering feedback from the industry.

“We will do everything we can to help aerospace companies fully understand and make use of the new system, so they can ease the financial burden they face in the course of doing business, even if only slightly,” said Tae seog Oh, head of KASA. “We will also actively identify support measures suited to companies’ growth stages and business characteristics.”

This content was produced with the assistance of AI translation services.