Penn State's general liability insurer, Pennsylvania Manufacturer's Association, has filed a motion indicating that they plan to argue against providing coverage to the University for claims arising out of the Jerry Sandusky scandal. PSU is about to get hammered with a slew of civil suits from the victims in the underlying criminal case (and potentially others who were not listed victims in that case). Their cases were bolstered by the Freeh report and PSU will very likely settle with some of the claimants who have the stronger cases.
It's expected that the damages and settlements from the civil suits would be covered, at least in part, by school's insurer. But now Pennsylvania Manufacturer's Association is arguing that the University failed to disclose or warn their insurer of known sexual abuse and misconduct by Sandusky. A snippet of the motion, via Dominique Debucquoy-Dodley of CNN:
"It would be unlawful and contradictory to public policy to require PMA to provide coverage to PSU under any policy issued to PSU after May 1998 with respect to PSU's concealment of Sandusky's sexually abusive conduct ... and failure to take appropriate action to prevent Sandusky from molesting minors," the motion read.
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