Insurer of Sandusky charity not obligated to pay defense costs
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The insurance company of the nonprofit youth charity founded by former Pennsylvania State University assistant football coach and convicted child sex abuser Gerald A. Sandusky is not obligated to pay his defense costs.
Judge Yvette Kane of the U.S. District Court for the Middle District of Pennsylvania on Friday ruled that “the conduct at issue is beyond the scope of the insurance policy's coverage.”
The insurer, Federal Insurance Co., in 2011 filed for declaratory judgment against Mr. Sandusky that it had no obligation to pay his defense costs or to indemnify him for civil and criminal lawsuits alleging sexual abuse of children, according to court documents.
Federal, which was the named insurer at the time of the Nov. 30 civil action against Mr. Sandusky, provided youth charity The Second Mile Inc. coverages under its directors and officers liability, entity liability and employment practices liability policies.
Mr. Sandusky in 2012 disputed Federal's coverage denial.
In the case, Ms. Kane said the child abuse did not arise as a result of Mr. Sandusky's capacity at Second Mile.
“Applying the facts set forth in the criminal and civil claims against Defendant Sandusky to the language of the insurance policy leads to the clear conclusion that Defendant Sandusky's offenses against children — whether proven or merely alleged — were not conducted in his capacity as an employee or executive of The Second Mile,” Judge Kane wrote in the summary judgment.
“Because Defendant Sandusky's conduct was clearly personal in nature and not in furtherance of his duties for The Second Mile, he is owed no criminal defense under the policy,” the judge said in the judgment.
Mr. Sandusky, a former defensive coordinator with Penn State's powerhouse football program, received a 30- to 60-year sentence after being convicted in June for sexually molesting 10 boys.
