Lady Gaga's production company and promoter are suing three Lloyd's of London insurance syndicates for not paying out on terrorism policies, after threats from Islamic extremists prompted them to cancel her concert in Jakarta.
The legal action has arisen after the singer pulled out last June from a sold-out show in the Indonesian capital, which the hardline Islamic Defenders Front (FPI) vowed to disrupt because it claimed the concert amounted to "satanic worship".
It comes amid growing concerns from companies that insurers are exploiting technicalities and semantics to turn down legitimate claims. The Law Commission in England is proposing to tighten the legal framework.
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Lady Gaga's production company, Mermaid Touring, together with Live Nation, a major American concert promoter, and The Atom Factory, which is owned by her manager Troy Carter, said in a claim filed in the US District Court in Los Angeles on March 3 that they had "suffered significant damages" as a result of the cancelled concert.
They claimed the insurers – two syndicates operated by Beazley and one operated by Talbot at the historic Lloyd's market – had refused to pay out based on "language and purported conditions that are not contained in the terrorism policies".
The plaintiffs said this was "unreasonable, without proper cause and in bad faith".
They are seeking damages of at least $150,000 for breach of contract and breach of good faith and fair dealing, as well as legal costs and further punitive damages.