Penn State says it has reached settlements with 26 victims of former assistant football coach Jerry Sandusky valued at nearly $60 million.
“The university maintains various liability insurance policies, which the university believes cover the settlements and defense of claims brought against Penn State and its officers, employees and trustees,” according to a statement from the university. It says the terms of the settlements are subject to confidentiality agreements.
University President Rodney Erickson has said Penn State has “multiple stacks” of civil liability insurance as well as directors’ and officers’ liability insurance “to cover the defense of the university’s executives, employees, trustees and so forth.”
Penn State has sued Pennsylvania Manufacturers’ Association Insurance Co.—the school's liability insurer of more than 50 years—for denying coverage for litigation costs related to litigation from victims of Sandusky. PMA filed a lawsuit in January 2012 seeking a declaratory judgment that it has no duty to defend or indemnify Penn State.
University spokesman David La Torre tells PC360, “Litigation continues.”
Sandusky was found guilty in June 2012 on 45 of 48 counts related to the sexual abuse of boys. He was sentenced to 30-60 years in prison.
The school says it has received claims from 32 alleged victims of Sandusky and has rejected six as being without merit. It has also “engaged others in possible settlement discussions,” the university says, and continues to use law firm Feinberg Rozen as an independent third-party facilitator of settlement negotiations.
Penn State and United Educators—reportedly the writer of the university’s educators legal liability coverage—are not waged in litigation.
The university also operates a captive insurer, Nittany Insurance.
Twenty-three of the 26 settlements valued at $59.7 million have been signed and three are “agreed in principle,” Penn State says.
“We hope this is another step forward in the healing process for those hurt by Mr. Sandusky, and another step forward for Penn State,” says Erickson, in a statement. “We cannot undo what has been done, but we can and must do everything possible to learn from this and ensure it never happens again at Penn State.”
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