While the insurance policy does provide for legal costs, the company's filing in U.S. District Court in Williamsport maintains that paying for such costs "arising from sexual assault, molestation" or abuse is "repugnant to Pennsylvania public policy" and so should be barred.
Sandusky has been charged with 50 counts of criminal conduct arising from what state prosecutors allege has been his molestation of 10 young boys he met through Second Mile. So far, two youths not counted among the alleged victims in the criminal case have filed civil lawsuits claiming abuse.
Prosecutors contend that Sandusky groomed his victims by giving them gifts and access to the Penn State football program.
Two Penn State administrators face charges of failing to do enough to stop the alleged abuse. Head coach Joe Paterno and university president Graham B. Spanier lost their jobs but were not charged with any crime.
The insurance lawsuit was filed Friday, the day after the second civil suit was filed by a man who claimed he was sexually abused by Sandusky.
The purported victim was identified in court filings as "C. Miller." He filed notice Thursday in Philadelphia of an impending lawsuit against the retired coach. The lawsuit also names Penn State and Second Mile as defendants.
Sandusky has denied all criminal and civil charges against him. He is free on $250,000 bail. The charges against him include involuntary deviate sexual intercourse, indecent contact, and corruption of minors.
Sandusky's criminal defense lawyer, Joe Amendola, told the Associated Press Friday that he had not seen the Federal Insurance complaint.
"I can say it's not unexpected that the insurance carrier would attempt to get out from under representing Jerry," Amendola said.
Contact staff writer Nathan Gorenstein at 215-854-2797 or firstname.lastname@example.org.