State Farm, Sandusky End Insurance Coverage Dispute

State Farm Fire and Casualty Co. resolved its dispute against former Penn State assistant football coach Jerry Sandusky over the insurer’s homeowners coverage.

At issue was whether State Farm would be obligated to pay for any defense costs or awards from criminal or civil cases that arose from Sandusky’s criminal action.

Sandusky was convicted on multiple counts of child sex abuse last year. Earlier this month, his attorneys argued a motion for a new trial.

The Centre Daily Time of Pennsylvania reported this month that Sandusky withdrew claims against State Farm. The report said U.S. Middle District Judge Yvette Kane signed a consent decree Tuesday, Jan. 15.

State Farm has been arguing that Sandusky’s homeowner’s policy excluded intentional acts arising from the policyholder’s willful or malicious conduct. The insurer also said there was limited liability coverage. The consent decree makes it official that State Farm would not have any obligation to pay for defense costs or awards related to cases filed against Sandusky. State Farm started insuring Sandusky›s home in Pennsylvania in 1985.

Separately, Federal Insurance Co., part of Chubb Group of Insurance Cos., is still waiting to resolve its case. Federal Insurance had issued a D&O liability and employment practices liability policy in March 2011 for The Second Mile, a charity founded by Sandusky, for the period that covers April 1, 2011 to April 1, 2012. Federal Insurance argues it is not obligated to pay for Sandusky’s defense costs or indemnify him for civil or criminal judgments.