Just days ago we unveiled the June issue of Risk Management featuring a “Behind the Music” cover story on the many — and sometimes deadly — risks of music festivals written by the infinitely talented Emily Holbrook. While the sex, drugs and rock and roll dangers are more sensational, the possibilities of event cancellation are always logistical nightmares.
Concerts can be called off for any number of reasons.
One died when Michael Jackson did.
And ever since, there has been a behind-the-scenes fight between promoters and insurers about who will foot the $17.5 million bill for the concert that never happened. The promoters had an insurance policy for such a contingency so they think insurers need to pay out. But the Lloyd’s of London underwriters who placed the policy argue that they were never informed of the King of Pop’s prescription drug abuse.
Thus, the dispute.
The insurance policy was taken out to cover the cancellation or postponement of the London concerts in the case of the death, accident or illness of Jackson.
The lawsuit claimed that AEG, who hired Jackson’s physician Dr. Conrad Murray, failed to disclose the singer’s medical history to the insurers “including, but not limited to, his apparent prescription drug use and/or drug addiction.”
The lawsuit further states that [concert promotors] AEG or Jackson or his company knew but did not disclose that Jackson was taking propofol — an anesthetic that is usually restricted to hospital use ahead of surgery.
It adds that attempts to resolve the dispute with AEG Live outside the courts have failed. “Underwriters therefore request that the policy be declared null and void.”
A policy is a policy, right? So maybe Lloyd’s should pay regardless? Then again, full medical disclosure was probably a discussed caveat to the insurance given Michael Jackson’s history. So the concert promoters should be on the hook?
Since resolution attempts have reportedly failed, it will likely come down to policy language and stated/presumed medical disclosure mandates for this type of policy.
But in your opinion, who should pay?
