The headaches for Penn State continue. Yesterday, the school's general liability insurance provider asked a judge to deny coverage for any legal action resulting from the Jerry Sandusky scandal because the administration of former president Graham Spanier lied about what it knew regarding Sandusky's rampant abuse of children.
The motion, filed in common pleas court by the Pennsylvania Manufacturer's Association, says Penn State did not provide it with information relevant to the insurable risk the association assumed. The association has already sued Penn State over the coverage of one of Sandusky's victims' claims against the university, filed in November 2011.A minor quibble with the article--Penn State's insurer is PMA Insurance, a subsidiary of Old Republic International Corporation. Nonetheless, the potential here is staggering. It could mean that Pennsylvania taxpayers could ultimately be on the hook for the whopping damage bills that are almost certain to result from any civil suits filed against Penn State by Sandusky's victims. If I'm wrong on this, any of the lawyers here can fill in the details.
The association has insured Penn State under general liability policies since 1976.
"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.
Then again, Penn State would be delusional to let any of those suits go to trial in any event--about the only chance it would have of winning would be to keep as many parents and grandparents off the jury as possible.