Lloyd's Losses: Unlimited embarrassment

Unlimited embarrassment

For almost three centuries, Lloyd's of London, a $5 billion insurance market, has provided coverage against earthquakes, floods, fires and storms, as well as all manner of man-made catastrophes. It pays off no matter what. When the U.S. boycotted the 1980 summer Olympics in Moscow to protest the Soviet invasion of Afghanistan, NBC collected $78.3 million from insurers because of lost advertising revenue.

Lloyd's is backed in covering these risks by syndicates, which are run by managing agents and made up of thousands of large and small investors, who are called "names." Lloyd's was once a clubby organization of British financiers,...

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