Insurer sues to keep from paying Penn State abuser's legal bills

Reuters News
Posted: Jul 24, 2012 12:35 PM
Insurer sues to keep from paying Penn State abuser's legal bills

WASHINGTON (Reuters) - Insurer State Farm said it should be exempt from paying for legal bills arising from former Penn State assistant football coach Jerry Sandusky's child sexual abuse case.

State Farm Fire and Casualty Co sold Sandusky a homeowner policy and filed a federal lawsuit last week arguing that the policy does not cover injuries caused by intentional, willful or malicious acts.

The State Farm policy provided limited personal liability coverage.

Sandusky, 68, was convicted last month on 45 counts of sex abuse involving 10 boys, sometimes at his home in State College, Pennsylvania.

State Farm began insuring the home in 1985 for Sandusky and his wife, Dottie, according to the complaint filed in the U.S. District Court for Middle District of Pennsylvania.

The company asked that the court declare that the policy did not cover legal costs for his criminal defense or civil lawsuits arising from the case.

Federal Insurance Co, which covers the Second Mile, the charity Sandusky founded for at-risk youth in 1977, is making payments for his defense, Sandusky's attorney Brian Osias said last week.

The National Collegiate Athletics Association (NCAA), the governing body of U.S. college sports, fined Pennsylvania State University $60 million on Monday in an unprecedented rebuke for the school's failure to stop Sandusky's sexual abuse.

In a sign of potential financial fallout from the NCAA move, Moody's Investors Service said it might cut Penn State's Aa1 revenue bond rating.

(Reporting by Ian Simpson, Mark Shade in Harrisburg and Caryn Trokie in New York; Editing by Jackie Frank)