Penn State Sues Insurance Company Over Sandusky Victims’ Claims Not Being Paid

Penn State’s attorneys sued its insurer of more than 60 years, Pennsylvania Manufacturers’ Association Insurance Company, over the company’s ‘failure and refusal’ to pay for the claims filed by Jerry Sandusky’s victims. 

According to the complaint, filed Tuesday in Centre County Court, the university is suing PMA for breach of contract. Penn State counsel argued in the complaint that for consecutive 12-month periods over 50 years, Penn State has purchased ‘comprehensive’ commercial and general liability insurance policies.

However, despite paying ‘substantial insurance premiums’ over that time, when Penn State was sued by several young men who either were or claim to have been sexually abused by Sandusky, “PMA failed to provide coverage for which Penn State had bargained and paid,” the complaint states. 

Ken Feinberg, the university’s mediator from Feinberg Rozen, LLP, delivered the first round of complaints from victims to Penn State in February, and expects to bring officials more demands soon. Feinberg said university officials have maintained their desire to reconcile the cases as soon as possible. 

Penn State spokesman Dave La Torre said via email the university is ‘disappointed’ in the inaction taken by its longtime insurer. 

“Having been a major client of PMA since the 1950s, Penn State is disappointed by the response of this insurance firm to the university’s situation.

“By refusing to honor its obligations to provide [full] coverage to Penn State, PMA has essentially abandoned a decades-long client. Penn State will aggressively pursue the coverage for which it has paid over $23 million since 1983 and to which it is entitled.

“The university continues to believe its General Liability and Directors & Officers insurance policies will cover the defense of claims brought against the University and its officers, employees and trustees. Student tuition, taxpayer funds or donations will not be used,” La Torre said.

Sandusky, 69, was sentenced to 30-60 years in prison for his sex crimes in October and is serving his sentence in a maximum-security prison at SCI Greene.

Centre County Complaint (Filed 3-5-13) by