The Virgin Galactic spaceship which crashed seconds after takeoff on Friday (31 October) was insured for losses between $40m (£25m) and $50m (£31.25m), according to insurance sources.

The lead underwriter for the spaceship's voyage was AIG. The company has declined to comment.

Virgin Galactic have countered criticism of its safety procedures, saying that claims that safety was not the company's top priority were "categorically untrue".

Michael Alsbury, 39, was the co-pilot who died when the SpaceShipTwo VSS Enterprise crashed shortly after take-off in Southern California, while a second co-pilot was left seriously injured.

The company is owned by billionaire Sir Richard Branson and he hopes to send tourists into space by 2015. More than 700 flights have already been booked by prospective space tourists at a cost of $250,000 (£156,000) each.

"We owe it to our test pilots to find out exactly what went wrong - and when we do find out what went wrong, if we can overcome it, we'll make absolutely certain that the dream lives on," he said after the crash.

"We would love to finish what we started some years ago," he added.

"In testing the boundaries of human capabilities and technologies, we are standing on the shoulders of giants. Yesterday, we fell short."