Kanye West Sues for $10 Million Over Cancelled Tour

08/04/2017 | Unfair Insurance Practices/Bad Faith

After Kanye West unexpectedly cancelled 21 Saint Pablo tour dates late last year because of a reported mental breakdown, Billboard estimated it would result in the refunding of more than 300,000 tickets worth $27.3 million. Kanye and his event company, Very Good Touring, Inc., carried event insurance for just that situation. But, according to a Complaint filed in Los Angeles Superior Court on August 1, Kanye’s insurers, Lloyd’s of London, won’t pay. Now Kanye has turned to our justice system in attempts to recoup at least $10 million of his loss based on claims for breach of contract and insurance bad faith.

A standard music industry policy would cover an "accident to or illness of any insured person which, in the opinion of an independent medical practitioner approved by the underwriters, entirely prevents any insured person from appearing or continuing to appear in any or all of the insured performances or events." As with most any insurance policy, this clause likely comes with certain exceptions which eliminate the insurer’s obligation to pay. Some examples of common exclusions are drug use, pre-existing conditions, sexually-transmitted diseases, and "unreasonable or capricious behavior."

One of these exclusions could explain why Lloyd’s won’t pay.  We don’t know whether an exclusion applies, but Kanye was reportedly hospitalized for eight days after this incident at UCLA Neuropsychiatric Hospital Center and was released under full time care and supervision.  The lawsuit states Lloyd’s has not provided any reasonable explanation for denying the insurance claim or indicated if they will ever pay the claim or even make an insurance coverage decision. 

Assuming California law will apply, in order to move forward Kanye will have to establish that the Saint Pablo claim is covered by his agreement with Lloyd’s. If he succeeds on that front, Lloyd’s can then still avoid paying the claim if they establish that some exclusion applies.  If no exclusion applies, then Kanye will attempt to prove that the insurer acted in bad faith for refusing to pay his claim. This bad faith claim potentially subjects Lloyd’s to paying Kanye’s attorney’s fee and punitive damages above and beyond the claimed $10 million policy.

Considering that his mental breakdown is a central issue of fact in the case, there is potential it will dig very deeply into Kanye’s personal life.  The world will surely watch as this case unfolds.