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Penn State sues insurer over Sandusky coverage

March 6, 2013 News Extra

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

The university said in the 18-page complaint filed in Bellefonte on Tuesday that it has been sued or contacted by 29 claimants but that the Pennsylvania Manufacturers’ Association Insurance Company 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 said 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 said PMA has denied coverage in some cases and failed to issue coverage determinations in others.

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

Penn State spokesman Dave La Torre said Penn State has paid PMA more than $23 million since 1983.

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