The Saint Pablo Tour had 21 dates left in November 2016 when West pulled the remaining shows after falling ill.
Lloyd's alleged the musician had used marijuana and refused to pay out, citing a clause in the contract about alcohol and drug use.
West, 40, then sued the insurer, citing his treatment at a psychiatric centre.
A judge in California dismissed the case on Wednesday after being requested to do so by lawyers from both sides.
West's lawyer and Lloyd's both declined to comment, other than to say the matter had been resolved "amicably".