Via Wired, it looks like the Da Vinci Project (now renamed the GoldenPalace.com space program) is running into problems with finding insurance.

Insurance is a huge deal for suborbital startups, and will probably turn out to be a showstopper for at least some of them. I was very surprised to find out how much of a problem insurance and launch licensing (including environmental regulation) were going to be when I first got seriously involved with this area. Launch licensing is partially addressed by Senate bill 2772, but insurance is still out there. If I was to start a suborbital launch services company tomorrow I'd tackle the insurance issue in parallel with vehicle development. The right vehicle design will keep insurance costs low, and the wrong design will drive them towards infinity.

Some of us have known for a long time that the rockets are the easy part. 8)

If you are a US citizen thinking of getting into this business, you have to hire competent people to build the rocket, build the relationship with the regulator, and build the relationship needed to get a sane insurance policy. If you aren't doing all three at once, you are playing solitaire with cards missing from your deck.

It seems like there would be lots of other countries out there willing to host the launch at much lower cost. It could be great publicity for a small country trying to build a tourism industry. If countries are willing to spend billions for the prestige of hosting the Olympics, I'm sure someone would be willing to waive insurance requirements for the prestige of hosting a space launch.

Waiving insurance costs isn't the way to go. Someone needs to be accountable for damage to third parties and a rocket theoretically can cause a lot of third party damage. Having said that, what is the issue here? Who can legally insure rocket launches? How much insurance does such a launch require? I couldn't tell from the Senate bill text.