Hunton Insurance Recovery Blog

As the New York Times recently reported, Bill Cosby joins the ranks of celebrity homeowners who have tapped defense coverage under their ordinary homeowner’s insurance. Others who paved the way include Roger Clemens, O.J. Simpson, and Bill Clinton. Each had “enhanced personal injury clauses” buried in the fine print of their policies that can provide a defense against lawsuits.¹ Bill Cosby has such a policy, and a federal court in California recently denied American International Group’s (“A.I.G.”) request to allow A.I.G. to immediately appeal an earlier decision which held that a “sexual misconduct” exclusion in Mr. Cosby’s homeowner’s policy did not limit this coverage and that A.I.G., therefore, owed a duty to defend Mr. Cosby against a lawsuit brought in California state court by Janice Dickinson (“Dickinson action”).² In denying A.I.G.’s request for an interim appeal, the court determined that it would be more efficient for the Ninth Circuit to “analyze all exclusions of the policy at the same time.”³

Although Ms. Dickinson alleges that Mr. Cosby sexually assaulted her in 1982, the basis of her claims in the Dickinson action relate to comments made by Mr. Cosby over thirty years later concerning the alleged incident, which Ms. Dickinson contends injured her reputation. The policy at issue covers Mr. Cosby against any suit seeking damages resulting from “personal injury,” including “shock, emotional distress, mental injury” and “defamation, libel, or slander.”

The policy clearly excludes coverage for “sexual misconduct,” but Judge Beverley R. O’Connell determined in a November 2015 order, that the sexual misconduct exclusion did not apply to the defamation claims asserted in the Dickinson action.⁴ Noting that California courts are divided as to the proper interpretation of the phrase “arising out of” in policy exclusions, the court held that the language of the sexual misconduct exclusion could be reasonably interpreted as supporting both Mr. Cosby’s interpretation that the phrase “arising out of” required Ms. Dickinson’s claims to be proximately caused by the sexual misconduct, as well as A.I.G.’s interpretation that the exclusion covers damages that merely relate to the misconduct. While agreeing that the alleged sexual misconduct and allegedly defamatory statements were “clearly factually related,” the court concluded that there was no evidence to support a finding that Ms. Dickinson’s defamation claims proximately resulted from Mr. Cosby’s alleged sexual misconduct or Ms. Dickinson’s allegations of rape: “Instead, the injuries Dickinson allegedly suffered originate from [Mr. Cosby’s] statements, which have only an attenuated factual connection with sexual misconduct. Sexual misconduct may be the subject matter of [Mr. Cosby’s] statements, but [Mr. Cosby’s] statements, not his alleged sexual misconduct, directly caused the injury for which Dickinson now seeks relief.”

¹Graham Bowley and Sydney Ember, To Defray Legal Costs in Defamation Suits, Bill Cosby Turns to His Insurance, New York Times (Mar. 13, 2016),

²See Order, AIG Prop. Cas. Co. v. Cosby, No. 2:15-cv-4842-BRO-RAO (C.D. Cal. Jan. 8, 2016), ECF No. 43 (granting leave to amend complaint).

³Id. at 12–13. In the same order, the court granted A.I.G.’s motion for leave to file an amended complaint, which included new causes of action relating to three exclusions that were not previously pleaded. See id. at 5–11. In its November 2015 order, the court dismissed A.I.G.’s claims based on the sexual misconduct exclusion without leave to amend, finding “any amendment would be futile” because A.I.G. “cannot amend the language of the Policies or the facts of the Dickinson [action] such that the sexual misconduct exclusion would unambiguously apply . . . .” Order at 13, AIG Prop. Cas. Co. v. Cosby, No. 2:15-cv-4842-BRO-RAO (C.D. Cal. Nov. 13, 2015), ECF No. 32.

⁴See generally Order, AIG Prop. Cas. Co. v. Cosby, No. 2:15-cv-4842-BRO-RAO (C.D. Cal. Nov. 13, 2015), ECF No. 32.