Penn State vs. Insurer: Who Will Cover Sex-Abuse Court Costs?

The allegations joining Penn State and its officials with the Jerry Sandusky sexual-abuse cases provide a regrettable study of how we turn to insurance to help us through the worst of situations—at least financially. As these allegations play out, the media has been quick to discuss their development and speculate on how the university’s defense will be funded.

Penn State’s Openness Web site, dedicated to providing “the latest information…regarding ongoing investigations,” reports that the university carries General Liability and D&O insurance, “which are expected to cover the defense of claims brought against the university and its officers, employees and trustees” in the Jerry Sandusky case. The General Liability carrier is identified as the Pennsylvania Manufacturers’ Association (PMA), which has provided General Liability insurance for Penn State from the 1950s to the present.