Bill Cosby's Insurer Wants Accusers' Defamation Lawsuit to Take a Back Seat

AIG Property Casualty Company believes its own dispute with Cosby should go first in order to prevent an "unjust result."
AP Images/Invision

Here's a crazy thought: the Bill Cosby scandal may impact what residents of Massachusetts pay to insure their homes.

OK, that could be going too far, but nevertheless, AIG Property Casualty Company is citing the "considerable" cost of having to defend the embattled comedian and demanding a federal judge in Massachusetts pause a lawsuit bought by three women who claim to have been defamed when Cosby's reps told news outlets that their rape claims were "fabricated," "ridiculous" and "absurd."

AIG is itself fighting with Cosby. The insurer has tentatively agreed to pick up the comedian's legal costs, but is seeking a declaratory judgment that when it agreed to cover Cosby for "personal injury," defined in the policy as including “defamation, libel, or slander," that this didn't mean a denial of allegations of sexual abuse.

It's not unusual for an insurer to go to court and cite exclusions in policies so as to free themselves of coverage responsibility. If insurance companies picked up everything, the costs would probably be passed down to consumers in the form of higher premiums. Often, though, these disputes over legal defense coverage take a back seat to whatever prompts the claim upon an insurer. 

Not this time.

Instead, just weeks after a federal judge denied Cosby's bid to dismiss a libel lawsuit from Tamara Green, Therese Serignese and Linda Traitz, AIG is asking to be given priority status.

"Staying further proceedings in the Green case will prevent the unjust result of AIG Property Casualty Company having to continue to provide Mr. Cosby with a defense, with independent counsel from two law firms, despite the fact that coverage under the insurance policies does not apply to the claims alleged in the Green case," stated an AIG motion. "The cost of this defense is considerable, and Mr. Cosby has yet to even answer the amended complaint."

AIG's bid to delay has set off an unusual event — both Cosby and his accusers on the same side for once. Well, sort of.

On Tuesday, an attorney for Green, Serignese and Traitz slammed the AIG motion as an inappropriate proposal "to unfairly shift its burden upon the innocent Green parties," saying that it would mean "degrading discovery and delaying relief." The accusers also say that federal case law weighs against pausing underlying tort action in favor of a decision on the insurer's responsibilities.

Cosby filed his own brief yesterday opposing AIG's motion and agrees with his sex abuse accusers that there's no good precedent for what the insurance company wants.

But the entertainer has his own motivations for not wanting the insurance battle to get ahead of the defamation lawsuit. Cosby wants the judge to either reject AIG's larger effort to get out of paying his legal bill or to put the insurance dispute on hold until the defamation case gets decided. To do otherwise, he argues, means "substantial prejudice" as it supposedly impairs his defense and "splits [his] focus and drains his resources."

If this isn't complicated enough, Cosby is also fighting AIG in California over the insurance company's bid to get out from paying his defense in the Janice Dickinson case. That's another defamation lawsuit — one where a judge just ordered discovery to proceed including a new Cosby deposition. Might that be halted too at the behest of AIG? Well, someone needs to pick up the legal tab.