Jackson's estate countersued for breach of contract. Terms of the settlement are secret.
"The estate, and, I'm sure Lloyd's, are glad the matter is resolved," said Howard Weitzman, an attorney for the Jackson side.
Lloyd's claimed it did not have to pay because the singer did not reveal his drug use.
Jackson died of an overdose of the anesthetic
The singer’s mother and children sued concert promoter and producer
Following a five-month trial, a Superior Court jury found AEG Live not liable in Jackson's death.
Testimony in the case showed that Jackson's estate repaid AEG the advance of more than $30 million the company gave Jackson during rehearsals.
Jackson's use of prescription painkillers became well known after his "Dangerous" tour came to an abrupt early end in 1993 when Elizabeth Taylor flew to Mexico City to take the singer to a rehab facility in London.
Paul Schrieffer, the attorney for Lloyd's, could not be reached for comment.