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Sandusky wants Second Mile insurer to cover defense costs in sex abuse case

Sandusky wants Second Mile insurer to cover defense costs in sex abuse case

HARRISBURG, Pa.—Former Pennsylvania State University assistant football coach and founder of nonprofit youth charity Second Mile Inc. Gerald A. Sandusky last week disputed claims that the charity's insurance company was not obligated to provide defense coverage costs in connection with child sexual abuse allegations facing Mr. Sandusky.

Federal Insurance Co. in December filed a declaratory judgment against Mr. Sandusky that it has no obligation to pay Mr. Sandusky's defense costs or to indemnify him for civil and criminal lawsuits alleging sexual abuse of children, according to court documents.

Based on a Commonwealth of Pennsylvania Grand Jury investigation, Mr. Sandusky has been charged with 52 criminal counts of child sexual abuse, according to court documents.

Federal, which was the named insurer at the time of the Nov. 30 civil action against Mr. Sandusky, provided The Second Mile coverages under its directors and officers liability, entity liability and employment practices liability policies.

Federal claims that Mr. Sandusky, who founded the State College, Pa.-based youth charity in 1977 and performed various executive roles until 2010, was not acting in his insured capacity and that “providing coverage for these types of criminal and civil claims would be repugnant to Pennsylvania public policy,” according to documents filed last week in federal court in Harrisburg, Pa.

Mr. Sandusky disputed Federal's coverage denial, claiming that the insurer's policies specifically provide coverage for the allegations in the criminal and civil matters.

“Federal sold this policy to and accepted premium from Second Mile, a statewide charity for children who have faced adversity; yet it did not include any exclusions, endorsements or policy provisions memorializing or noting the purported Pennsylvania public policy upon which it seeks to rely,” Mr. Sandusky said in the court filing.

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