On March 1, 2013 the Federal District Court for the Middle District of Pennsylvania ruled that Jerry Sandusky is NOT entitled to insurance coverage under the Second Mile's Employment Practices Liability insurance policy for defense costs and attorneys' fees for both the criminal case and the civil cases either filed or to be filed.
As most know, the Second Mile is a charity founded by Sandusky and for which Sandusky held various positions, including officer, director and volunteer. Sandusky has been tried and convicted of numerous counts of child sexual assault and is currently serving a prison term of 30-60 years. Numerous civil complaints have been filed against Sandusky and the second Mile as well. The Court ruled last summer that the Second Mile's insurer had no duty to pay any settlement or judgment on Sandusky's behalf because such coverage was void as against public policy.
The decisions affect only Jerry Sandusky at this point because the Court has not yet ruled on any coverage issues for the Second Mile charity itself, or its officers and directors. But, in my opinion, the decisions mean that it is unlikely that the Second Mile or its officers and directors will have coverage.
In an upcoming issue of our newsletter, Insuring Your Business, we will have more on why this decision may be just in this case, but may be bad news for coverage under employment practices liability policies generally.
The McNees Insurance Recovery Group helps clients understand their insurance coverage, submit claims and, where appropriate, sues insurance companies for failing to honor legitimate claims.