PSU at odds with its insurer

It said claims from Sandusky case were not being honored.

Posted: March 07, 2013

HARRISBURG - Pennsylvania State University alleges in a new lawsuit that its insurance carrier has not been honoring its obligation to cover claims related to sexual misconduct by former assistant football coach Jerry Sandusky.

The university says in the 18-page complaint filed in Bellefonte on Tuesday that it had been sued or contacted by 29 claimants, but that Pennsylvania Manufacturers' Association Insurance Co. has not provided coverage.

The lawsuit alleges breach of contract and bad faith, and seeks damages and costs.

The filing lists five lawsuits and letters from attorneys for 24 other claimants who have contacted the university related to Sandusky.

It says the school has been a customer of the Blue Bell-based insurance company for more than 50 years.

"Despite the substantial insurance premiums that Penn State paid PMA over the course of those years, when various individual claimants began to raise claims and file lawsuits against Penn State concerning the alleged sexual misconduct of Sandusky, PMA failed to provide the coverage for which Penn State had bargained and paid," the school's lawyers wrote.

The lawsuit says PMA has denied coverage in some cases and failed to issue coverage determinations in others.

Pennsylvania Manufacturers spokeswoman Diane Nafranowicz said Wednesday the company would not comment.

Penn State is attempting to negotiate settlements with Sandusky's victims and accusers, and university officials were given settlement offers by some of them last month.

Sandusky, 69, is serving a 30- to 60-year prison term for the sexual abuse of 10 boys, and is pursuing appeals of his 45-count guilty verdict.

Three former Penn State top administrators are facing charges that include perjury and obstruction for what prosecutors have described as a conspiracy to cover up complaints about Sandusky in 1998 and 2001.

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