O.J. Simpson's homeowner insurance is covering his estimated $2 million legal bill at his civil trial but won't pay any damages if he is found responsible for the slayings, industry experts say.
The experts said Simpson's insurer is believed to have "reservation of rights" allowing it to stop paying if the football great is found to have intentionally killed Nicole Brown Simpson and Ronald Goldman.Simpson is able to wage the high-priced legal battle in the wrongful-death case because of a simple extension of his policy that many homeowners have without even realizing it.
"We call it a `plup' - a personal liability umbrella policy," said Bill Sirola, a spokesman for State Farm Insurance.
Standard home policies insure against "slip-and-falls" and other personal injury and property damage claims, typically up to $250,000. Umbrella coverage extends to areas like defamation and, usually, wrongful death. It costs only $200 or $300 a year more for each $1 million extra.
"For somebody that's high-profile like O.J. Simpson, it might be a little higher," Sirola said. "Celebrities get sued a lot."
Sirola said State Farm isn't Simpson's carrier. But it is one of two insurers that sold President Clinton umbrella coverage, and it is paying to defend him against defamation charges that are part of Paula Jones' sexual harassment suit.
When defending policyholders, insurers have the right to pick the lawyer, and they generally do. But in extraordinary cases, the insurance company lets the defendant choose. Clinton, for example, hired Robert Bennett at $475 an hour because of the one-of-a-kind constitutional issues involved.
Simpson hired Robert Baker. It was unknown how much Baker is getting by the hour, but sources have said the case cost about $2 million to defend.
During preparations for Simpson's civil trial, evidence about his finances was sealed, so it's unclear how much insurance he had or who provided it. One industry source said his carrier demanded to be kept secret as part of the deal to pay for the defense.