No doubt you’re aware of the legal troubles facing Bill Cosby. At this time, more than 8 women have filed lawsuits against the 78-year old comedian, actor and author – alleging he sexually assaulted and defamed them. So who’s taking care of all those legal bills? Would you believe his homeowner’s insurance?
Cosby has “personal injury” coverage under his homeowner’s insurance which is an umbrella policy that includes defamation. This is different than the more common “bodily injury” coverage that might be used in the case of an automobile accident.
AIG is the provider of Cosby’s coverage and they are none too thrilled. They have gone to court claiming they should not be responsible for covering sexual misconduct. So far, their complaints have fallen on deaf (judicial) ears. In November, a Los Angeles judge ruled in favor of Cosby, saying the policy was not clear and that the lawsuits were for alleged defamation, not alleged sexual assault. AIG is making the same claims in federal courts (California and Massachusetts) and in a state court in Pennsylvania.
It’s fairly common for celebrities, or those with multi-million dollar assets, to carry this type of umbrella coverage. In fact, the New York Times reports Bill Clinton, Roger Clemens and O.J. Simpson have used personal injury coverage to pay their respective legal bills.
Should you carry a similar umbrella policy? Again, if you have assets worth more than $1 million, it might be wise to carry this additional insurance. And one bit of advice regarding any insurance policy (not just homeowner’s insurance): insurance policies are contracts between you and the insurer. If you are unclear about what is covered, contact your agent.
