Here's why insurance giant AIG has agreed to pay Bill Cosby's legal bills

This image was removed due to legal reasons.

Bill Cosby has hired some expensive lawyers to battle accusations from women who say he sexually assaulted them. But the comedian has had some help from an unusual source in paying their bills—AIG, Cosby's homeowner insurance provider.


The insurance giant has tentatively agreed to pay Cosby's legal costs, according to the Hollywood Reporter's Eriq Gardner. As it turns out that there are all sorts of protections included in homeowners and renters insurance that you might not expect, according to University of Pennsylvania law professor Tom Baker. It all started in the 1940s when insurance salesmen came up with unusual add-ons to “get people to ‘yes,’” Baker told me.

Because of this, almost all policies for homeowners and renters in America include “personal liability” options, including defamation protections. Baker has also seen policies that offer protection against false imprisonment and malicious prosecution. More common situations are for someone getting drunk and falling at your house party, or if your dog bites a neighbor who sues.

For these reasons, by the way, buying homeowners or renters insurance might be a great idea.

Cosby isn’t the first to use his insurance in this way—former president Bill Clinton had coverage when Paula Jones, a former Arkansas state employee, sued him for sexual harassment.

"Unless they can prove the complaint arises out of an exclusion in the policy, the insurance company has to defend the lawsuit," Baker said.

Cosby has not been charged criminally, and he has repeatedly denied accusations that he did anything wrong.


AIG is now asking a judge to step in and decide whether Cosby’s policy actually covers claims brought by women who say they were defamed when Cosby denied sexually assaulting them, according to the Hollywood Reporter's Gardner. AIG noted that Cosby has hired lawyers from two firms and that “the cost of this defense is considerable.”

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.