I did some reading on this. Looks like the UN 1967 Outer Space Treaty and the 1972 Liability Convention define the “launching state” as being liable for damage caused by space objects, both on Earth and in outer space. Off the latter:
In 1978, the crash of the nuclear-powered Soviet satellite Kosmos 954 in Canadian territory led to the only claim filed under the convention.
Anyway, for the US, the FAA requires companies to carry liability insurance for potential damages caused by their launches. U.S. law caps the company’s liability. The government may cover damages exceeding this cap, but only up to a certain amount.
Basically, SpaceX would likely be responsible for initial claims up to their insurance limits. Beyond that, the U.S. government would step in. Considering how wealthy Mr Musk is, I don’t think taxpayers should be paying a dime to clean a his mess… but the US government is contracting SpaceX.
M’kay, Mr. Pope. Nothing ironic or hypocritical about this statement at all…