ORLANDO, Fla., Jan. 27 (UPI) -- Sirius XM's newest satellite isn't working properly and may be the subject of a $225 million insurance claim, the company said Wednesday in a filing with the U.S. Securities and Exchange Commission.
"We have purchased insurance policies covering SXM-7 through launch and the first year of in-orbit operation," Sirius XM said in its filing. "We have notified the underwriters of these policies of a potential claim with respect to SXM-7."
Sirius XM said three of its satellites in orbit will continue to provide service, one of which SXM-7 was to replace eventually. Sirius XM and many other satellite operators launch replacement craft well in advance of any expected obsolescence.
"The SXM-7 issue will have no adverse effect on the operation of our satellite radio service nor on our existing fleet of operating satellites," the company said in an email to UPI.
The failure on the record of the manufacturer, Colorado-based Maxar Technologies, is not a disaster, said Chris Quilty, a space analyst and owner of St. Petersburg, Fla.-based Quilty Analytics.
Maxar and its subsidiaries have "almost an unblemished record over 40 years of having no satellite failures on orbit," Quilty said.
Some observers, however, will wonder if recent changes and cuts in the workforce at Maxar's space operations contributed to the failure, he said.
"When it was going through the testing phase, they discovered a performance [problem] ... but apparently they didn't totally fix it," Quilty said. He said Maxar wound up paying millions more in the attempt to fix the issue.
SXM-7 was to aid delivery of Sirius XM's entertainment and data services to more than 100 million subscribers in North America, according to the company.
The satellite includes a large antenna and solar arrays that span 100 feet when unfurled, weighing in total more than 15,400 pounds. Maxar built and tested it at the company's laboratory in Palo Alto, Calif.
Maxar has built all seven of Sirius XM's satellites, including the first spacecraft that were launched in 2000. An eighth satellite is on order with Maxar.
Sirius XM service comes installed in new vehicles from every major automaker in the United States and is available in nearly half of the preowned vehicles for sale in the country, according to the company.