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Cosby Complains in Court: Insurer Threatens His Defamation Defense

By Ephrat Livni, Esq. on September 22, 2015 | Last updated on March 21, 2019

Bill Cosby thought he had it covered -- his homeowners' insurance promised to take care of costs arising from personal injury, including "defamation, libel, or slander." But now that he faces accusations from women around the country that he defamed them by denying their accusations of sexual misconduct, the comedian is also under fire from his insurer.

Last week Cosby asked a Massachusetts federal judge to dismiss AIG Property Casualty Company's claims for declaratory relief. The insurer wants the court to decide that it is not responsible for coverage in defamation cases which arise from sexual misconduct based on an exception in Cosby's policy. AIG has sued its famous client on two coasts.

Cosby's Defense Is in Jeopardy

Cosby obviously disagrees with the insurer's tactics. His lawyers wrote in a memo filed last week, "AIG placed its interests ahead of Mr. Cosby's, jeopardizing his defense in the underlying litigation, forcing him to litigate on multiple fronts, and forcing him to divert time and financial resources."

Cosby's counsel argued that AIG's efforts to fight payment on the policy would drain the entertainer's coffers and exhaust him, undermining him in other cases. Basically, Cosby is saying that by fighting him, his insurer is bolstering the cases of four women suing him for defamation now.

Timing Is Everything

The women -- three in Massachusetts and one in California -- say that they were defamed when Cosby's representatives denied their accusations that sexual misconduct occurred. Cosby claims that not all of the accusations at question in the pending lawsuit stem from sexual misconduct and that AIG cannot conclusively preclude coverage.

Cosby is concerned that the very existence of the AIG suits undermines his position in the defamation cases. And a finding that the insurer is not responsible for costs arising from those defamation cases is likely to read like support for the women suing him. The timing is bad for Cosby.

As the memo by Cosby's lawyer states, AIG's action "splits Mr. Cosby's focus and drains his resources."

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