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Embattled USA Gymnastics sued seven of its insurers on Friday seeking defense costs related to damages suits it faces related to the sex abuse scandal involving former team doctor Larry Nassar.
The case, USA Gymnastics v. Ace American Insurance Co. f/k/a CIGNA Insurance Co., Great American Assurance Co., Liberty Insurance Underwriters Inc. et al was filed in Marion Superior Court in Indianapolis.
USA Gymnastics said in the complaint it has been named as a defendant in at least nine different lawsuits in connection with the actions of Mr. Nassar.
“In our ongoing efforts to work toward resolution with a number of lawsuits related to Larry Nassar,” USA Gymnastics said in a statement, “USA Gymnastics has filed an action for declaratory relief in Marion County against its own insurers. While the insurers have paid some defense costs, the organization is bringing this action to maximize insurance proceeds available for settlement or resolution.”
All allege various claims against USAG, the complaint said, including negligent hiring, negligent retention, negligent supervision, and negligent failure to warn, train or protect. The plaintiffs also filed claims against USAG for fraud, intentional infliction of emotional distress and violations of the Racketeer Influenced and Corrupt Organizations Act.
In January, Mr. Nassar, the former USA Gymnastics and Michigan State University doctor, was sentenced to 40 to 175 years in prison after more than 150 women and girls said he had sexually abused them over the past two decades.
Seven insurance companies were named in the lawsuit: Ace American Insurance Co., a unit of Chubb Ltd.; Great American Assurance Co.; Liberty Insurance Underwriters Inc.; National Casualty Co., a unit of Nationwide Mutual Insurance Co.; RSUI Indemnity Co., a unit of Alleghany Insurance Holdings L.L.C.; TIG Insurance Co., a unit of Fairfax Financial Holdings Ltd.; and Virginia Surety Co. Inc.
“An actual controversy exists as to the scope of USAG’s rights and Defendant Insurers’ obligations under their respective policies regarding for the Underlying Lawsuits and related claims,” USAG said in its complaint. “All required premiums on the policies have been paid in full. All other pertinent conditions to coverage have been satisfied, excused, or waived.”
USAG said in the complaint that it has been damaged by the insurers’ refusal to confirm coverage and satisfy their duty to defend.
“Defendant Insurers have breached their duties to defend by not providing a full defense, and/or by not timely and fully reimbursing defense costs,” the complaint said. “Defendant Insurers’ wrongful denial of coverage and refusal to confirm they will indemnify USAG is a breach of their obligations to USAG under their respective policies.”
USAG said in the complaint that “as a result of Defendant Insurers’ breach, USAG has incurred costs, expenses, and damages, including actual and consequential damages arising from the breach and prejudgment and post-judgment interest on all such damages.”
USAG asked the court to require the insurers to defend and indemnify in the lawsuits and related claims and find that the insurers have breached their obligations under their respective policies.
The complaint also asks the court to order the insurers to pay for all of USAG’s actual and consequential damages, costs and attorney’s fees and pre-judgment and post-judgment interest on all such damages; and award “any additional relief, including any appropriate equitable relief, as the Court may deem just and proper.”
National Casualty said in an email statement: "While National Casualty is not in a position to get into specific details of this suit, the company has been compliant with terms of the policy with USA Gymnastics. Having said that, our thoughts continue to go out to the victims of this terrible situation."
Liberty Mutual Group and Chubb declined to comment. The other defendants did not respond to requests for comment.
A 2013 Minnesota law easing the state's statute of limitations on sexual abuse claims has led to a barrage of claims against a Minnesota Catholic archdiocese and renewed concerns among institutions nationwide about the potential effect of such laws.