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Penn State prez believes ‘we are adequately covered’ for civil suits

Former Penn State assistant football coach  Sandusky is handcuffed as he leaves the Centre County Courthouse in Bellefonte Reuters

Earlier this past week, attorneys for the victim in the infamous locker-room rape at the hands of Jerry Sandusky confirmed that their client was preparing to file a civil lawsuit against Penn State for what it described as “egregious and reckless conduct.”

That civil suit is expected to be one of myriad similar suits — there were 10 Sandusky victims in his 50-plus count indictment — filed at some point in the future.  If that indeed comes to fruition, the university believes it will be covered financially.

In an interview with CBS’ Face the Nation scheduled to air Sunday, PSU president Rodney Erickson told the program that “we believe we are adequately covered” by the school’s general liability coverage.

“[W]e hope to be able to settle as many of these cases as quickly as possible,” Erickson said. “We don’t want to, if at all possible, drag victims through another round of court cases and litigation. If we can come to an agreement with them, with their attorneys, we believe that would be the best possible outcome in this whole very, very difficult, tragic situation.”

In the statement released by Victim 2′s lawyers, no dollar amount that their client would be seeking was mentioned.

Relying on general liability coverage, though, could prove troublesome for the university.

Penn State’s general liability insurer sought last week to deny or limit coverage for Sandusky-related claims. Pennsylvania Manufacturers’ Association Insurance argued that Penn State withheld key information needed to assess risk.

In a memo filed in court in Philadelphia, the company argued that Penn State failed to disclose that it had information about Sandusky that “was material to the insurable risk assumed by PMA.” The company, which has long insured the university, also argued that its policies after March 1, 1992, were amended to exclude “abuse or molestation” and that coverage for such behavior is excluded as a matter of public policy in Pennsylvania.

It remains unclear how many victims will actually follow through and file civil suits against Penn State, or if there are additional victims — or how many — not involved in the criminal case who could come forward in the future.

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14 Responses to “Penn State prez believes ‘we are adequately covered’ for civil suits”
  1. tommy57 says: Jul 29, 2012 9:05 AM

    There is absolutely NO WAY the university can or should limit settlements based on a level of insurance coverage. This is the correct arena in whcih to compensate victims AND punish the university for wrongdoing and coverups by senior PSU officials as related to the Sandusky crimes. PSU must and will compensate the victims.

  2. brycebstone says: Jul 29, 2012 10:00 AM

    That’s not what the story said at all. The amount the victims receive is based on what the civil litigation process concludes. However, generally, universities have a great deal of insurance to cover lawsuits, making it less likely that PSU exceeds its insurance coverage and has to pay out of pocket.

    I beg of everyone, process this situation with open minds and fully understand what is being said. Too much of this process is based on presumptions and looking at situations with something-other-than-rose colored glasses.

  3. dayno66 says: Jul 29, 2012 10:26 AM

    The judge/jury won’t even be informed of how much insurance PSU has. They will give damages as they see fit and PSU will pay it. Even though it’s much more likely PSU will just give all of the victims millions to settle. PSU wants this saga to end.

  4. tommy57 says: Jul 29, 2012 11:18 AM

    Not for nothing, but a study of lottery winners reveals that 70% squander all their winnings within a few years because they did not have the personal finance or money management skills before winning. The same is true for the recipients of large court settlements. Of course the victims deserve a hefty financial settlement, but I’d also like to see PSU fund full university educations (at the university of each victim’s choice providing they are admitted academically) and also PSU-funded councelling/therapy for life.

  5. dannythebisforbeast says: Jul 29, 2012 11:55 AM

    FYI. Penn state has yet to contact any of the victims attorneys to make offers and head off lawsuits as they said they would.

    Administration is still a problem

  6. dannythebisforbeast says: Jul 29, 2012 12:38 PM

    Erickson is an embarassment to Penn State.

    1. Spaniers underling VP for 13 years

    2. Waits for Freeh report before proavtively doing anything to restore Penn States name

    3. Unilaterally accepts NCAA sanctions without consulting board. I would also say cowers to their death penalty threat which if Penn State didnt f up so bad could have fought against because the Freeh report is not all facts but many conclusions/assumptions to inform Penn State what not to do anymore. I digress

    4. Says that he does not want to drag victims thru litigation etc. but has YET to reach out to any of them to make offers or at minimum state to them personally what he says in public about not dragggin them thru the legal process. One attorney said they would love to hear from him but havent and will have no choice but to file a lawsuit.

    He is completely reactive administrator, they need someone proactive, with character and balls
    of which he has neither. He is exactly the type that allowed this to fester and continue for years.

  7. sparky151 says: Jul 29, 2012 1:13 PM

    Most of the victims probably don’t have valid complaints vs PSU if the university defends itself. The boy McQueary saw but didn’t help has the best case. The 3 boys who were seen by janitors might have cases but probably don’t. The boys who were raped elsewhere don’t have a case based simply on Sandusky’s employer. They all have great cases against Sandusky but he’s probably judgement proof by now. They may have cases against the child welfare agencies who didn’t protect them.

    Penn State is on the defensive and will probably make offers to all 10 victims of Sandusky but really only 1 of them has much of a case.

  8. stoutfiles says: Jul 29, 2012 1:22 PM

    Ha! Ericson is a moron, he should know that this falls under the “abuse or molestation” amendment. Insurance will pay nothing. The NCAA fine will be nothing after the victims get their money straight from the bank of PSU.

  9. thekatman says: Jul 29, 2012 3:28 PM

    PSU’s endowement is $1.6B+, so they’re covered.

  10. alligatorsnapper says: Jul 29, 2012 3:35 PM

    katman said it accurately about PSU’s endowment. Doubt anyone will lament or miss any endowed chair at PSU if they have to use any of the billion plus. However, from all reports we have heard, including from southernpatriots’ friends in ‘burgh and Phlly, PSU is self-insured against these kinds of law suits or judgments so it will likely come from the endowements.

    As is now record most victims of child rape and sexual abuse receive about $1 Million in settlement or jury award after all appeals. This would not be hard for PSU to handle with their current financial situation. The much harder matter as southernpatriots has noted in previous threads is the 1 billion in debt that may be downgraded and Moody may in fact lower their credit bond ranking very soon, costing them much money in interest on their loans.

  11. seanb20124 says: Jul 29, 2012 8:56 PM

    Just raise tuition or student activity fees.

  12. onbucky96 says: Jul 29, 2012 8:57 PM

    Could care less, Penn State allowed Jerry to stay and moleste children. Pay up.

  13. dmcgrann says: Jul 29, 2012 11:27 PM

    thekatman said:

    PSU’s endowement is $1.6B+, so they’re covered.

    ______________________

    Yep. Only $800 million less than Pitt.

  14. dkhhuey says: Jul 30, 2012 4:37 PM

    Yes – the Penn State BoT – a daily reminder of delusion and stupidity. I’m guessing the last thing you would want, as an insurance company or defense attorney is to hear your client say they have plenty of cash to deal with the onslaught of lawsuits coming their way.

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