State Farm, Sandusky End Insurance Coverage Dispute

January 17, 2013

State Farm Fire and Casualty Co. resolved its dispute against former Penn State assistant football coach Jerry Sandusky over the insurer’s homeowners coverage.

At issue was whether State Farm would be obligated to pay for any defense costs or awards from criminal or civil cases that arose from Sandusky’s criminal action.

Sandusky was convicted on multiple counts of child sex abuse last year. Earlier this month, his attorneys argued a motion for a new trial.

The Centre Daily Time of Pennsylvania reported this morning citing court documents that Sandusky withdrew claims against State Farm. The report said U.S. Middle District Judge Yvette Kane in Pennsylvania signed a consent decree Tuesday, Jan. 15.

State Farm has been arguing that Sandusky’s homeowner’s policy excluded intentional acts arising from the policyholder’s willful or malicious conduct. The insurer also said there was limited liability coverage. The consent decree makes it official that State Farm would not have any obligation to pay for defense costs or awards related to cases filed against Sandusky.

Separately, Federal Insurance Co., part of Chubb Group of Insurance Companies, is still waiting to resolve its dispute. Federal Insurance had issued a directors-and-officers liability and employment practices liability policy in March 2011 for The Second Mile, a charity group founded by Sandusky, for the period that covers April 1, 2011 to April 1, 2012. Federal Insurance argues it is not obligated to pay for Sandusky’s defense costs or indemnify him for civil or criminal judgments.

Latest Comments

  • January 24, 2013 at 6:41 pm
    Huh! says:
    I thought all criminal acts of an insured were excluded from all policies
  • January 17, 2013 at 4:57 pm
    hammer10 says:
    It's funny that State Farm covered President Clinton's harasment claim with Paula Jones! Chubb paid 50% of the indemnity and expeneses. Indemnity was $750,000 and expeneses ... read more

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