Lloyd's of London: MJ Lied, So We Won't Pay

6/6/2011 3:19 PM PDT

Lloyd's of London: MJ Lied, So We Won't Pay

Lloyd's of London has gone to court ... asking a judge to let the company off the financial hook, claiming it doesn't owe the Michael Jackson Estate $17.5 million on grounds MJ was a fraud.

The company issued the muilti-million dollar policy to cover the doomed "This Is It" tour for losses. 

But Lloyd's claims it doesn't have to honor the policy for 2 primary reasons:

1.   Michael Jackson and AEG allegedly lied about Michael's medical history -- specifically, MJ said he had not seen a doctor other than a cosmetic MD since June, 2005.

2.  Michael did not disclose he was taking prescription drugs prior to and at the time of his death -- including Propofol.

Lloyd's is asking the court for a declaration that the policy is null and void as a result of the alleged fraud.

Howard Weitzman, the lawyer for the Estate, tells TMZ, "This legal action is nothing more than an insurance company trying to avoid paying a legitimate claim by the insured."