Penn State Countersues PMA Over Coverage of Sandusky Lawsuit

By | February 17, 2012

Penn State has filed a countersuit against its primary general liability insurer, Pennsylvania Manufacturers’ Association (PMA) Insurance Co.

PMA had filed for declaratory judgment on Jan. 31, arguing that the Blue Bell, Penn.-based insurer should not have to pay for the university’s defense costs in a civil lawsuit regarding the alleged misconduct of Jerry Sandusky, a former university football coach.

PMA argues that it is not obligated to pay out on policies written after 1991 because of exclusions for “abuse or molestation,” “intentional acts” and “known loss.”

But in its countersuit filed on Wed., Feb. 15, at the Court of Common Pleas of Centre County, Penn State argues that its liability policy from PMA should provide a legal defense and coverage of the lawsuit.

“Despite substantial insurance premiums paid by the university to PMA over decades, PMA has refused to provide the coverage for which the university is entitled,” according to David Gray, Penn State’s senior vice president for finance and business.

“We are extremely disappointed that rather than act in good faith with its insured, PMA instead chose to file an anticipatory lawsuit against us.”

Penn State says that its lawsuit against PMA seeks to “enforce its rights under its PMA policies and is in sharp contrast to PMA’s tactical action.”

Penn State has sought coverage from PMA for a lawsuit filed last November by a young man who claims Sandusky sexually abused him as a boy and threatened to harm his family to keep him quiet, according to Associated Press reports.

Penn State has stated it has already spent more than $3 million in various legal, consultant and public relations costs related to the investigation of child sex-abuse charges against Sandusky.

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