Homeowner's Insurance & Defamation

Factual Questions
1

In following the Bill Cosby case, I’ve learned that it’s not unusual for homeowner’s insurance to cover if you’re sued for defamation. The insurance company is on the hook to pay for your defense. In this case, it’s the insurance company that’s been paying for Cosby’s defense in all the defamation suits against him. (So the only lawsuits Cosby’s been having to pay for himself are the one for sexual assault and the one where his homeowner’s insurance has been trying to get out of paying for his defense in the defamation cases. [They say the cost of defending Bill Cosby has already been considerable.])

Bill Cosby is now counter-suing in one defamation lawsuit. He has also filed a lawsuit for defamation against Beverly Johnson who (as far as I’ve heard) is not suing him.

Questions:

  1. If the homeowner counter-sues for defamation does the insurance company have to pay for the expense of the counter-suit? I.e. is a counter-suit considered part of a defamation defense or is it a separate, non-covered offensive action?

  2. If the homeowner sues someone for defamation when that person is NOT suing him, is that covered by the homeowner’s insurance? Or does the homeowner have to pay for the cost of the lawsuit himself?

2

The homeowner policy would only cover defense against defamation, not pay for the expense associated with suing someone else for your defamation. The coverage in your policy is a liability coverage.

So the answer to both your questions would be “no”.

3

So when there is both a suit and a counter-suit, how does the attorney divided up the fees for the suit and the counter-suit? Will the attorney accept the counter-suit portion of the trial on a contingency basis?

4

If it is the same attorney, they are usually keeping their time, so they will simply bill their time accordingly.

Most defamation attorneys will bill by the hour. In Mr. Cosby’s case, I can imagine that few would want to take his case on a contingency basis.

What is more common, is that the insurance company has a panel of law firms that they use for these types of things. I can easily imagine that they would appoint a set of lawyers for the suit that they are defending, and Mr. Cosby would have a set of attorneys for the case he is bringing.

5

Thanks to Omar Little and Caffeine.addict for the information.