Filed Under:Markets, Personal Lines

Sandusky, State Farm End Coverage Dispute

Former Penn State University assistant football coach Jerry Sandusky in an Oct. 9 file photo being taken from the Centre County Courthouse. (AP Photo/Matt Rourke, File)
Former Penn State University assistant football coach Jerry Sandusky in an Oct. 9 file photo being taken from the Centre County Courthouse. (AP Photo/Matt Rourke, File)

Convicted child abuser Gerald Sandusky and his homeowners’ insurer, State Farm, settled a lawsuit brought by the insurer to have a judge declare the company has no obligation to defend the former Penn State University assistant football coach.

Sandusky had looked to his State Farm homeowners’ policy for defense and indemnity costs related to his criminal trial and a civil lawsuit filed against him.

According to court records, U.S. District Court Judge Yvette Kane in the Middle District of Pennsylvania dismissed the suit after Sandusky and State Farm filed a consent motion to dismiss the case.

The consent order is signed by Sandusky and his wife, Dorothy.

“Gerald Sandusky has no intention to tender to State Farm any future claims similar to the claims involving alleged sexual misconduct that he previously tendered,” reads the order, which adds that the couple agrees with State Farm that it “has no obligation to provide defense to or indemnify” Sandusky.

State Farm began insuring the Sandusky home in State College, Pa. in April 1985. It was primarily a property coverage policy with limited personal liability coverage applying only to bodily injury caused by an occurrence, according to court documents.

Sandusky in June 2012 was found guilty on 45 of 48 counts related to the sexual abuse of boys.

The insurer did provide a defense to Sandusky for the civil action filed in November 2011—shortly after Sandusky was first charged with sex crimes—involving his charity for children with dysfunctional families.

State Farm says it issued a “reservation of rights letter” to Sandusky, which informs a policyholder that an insurer may eventually deny coverage for all or part of the claim.    

The homeowners’ policy “excludes coverage for bodily injury that is intentionally caused by the policyholder” and it does not cover injury due to “willful and malicious acts of the policyholder.”

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