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Maybe the insurance company wants proof it's PSU's fault?
ok, you got me, what is unbelievable? This is exactly what they should do. This is not atypical at all. Insurance companies routninely deny coverage and have to be sued to obtain it. Just because the BOT is incompetent doesn't mean they should not sue the university's insurer.
So, you would prefer PSU pay out of pocket rather than attempting to get their insurer to cover the fiscal damages?
You probably could have put this in the other BOT thread you made, rather than starting a new thread.
I know it's in PSUs best interests for the insurance company cover these costs.
But is there proof that PSU actually enabled Sandusky?
If I was the insurance company I would want proof that PSU had a hand in the crimes. What proof is there? The Freeh report?
I think the potential issue is that Erickson was paraded around almost begging people to come forward so PSU could just pay them. Erickson basically opened up the insurance company's check book and ran a small campaign to "come get yours!".
I wonder if the insurance company doesn't agree that PSU is clearly liable for all these claims. I don't know squat about cooperate insurance so maybe someone else can chime in on how this works. Does the insurer usually get a say on settlement decisions in these cases?
This post was edited by spud358 13 months ago
The insurance company has the only say on whether they pay prior to proceeding to suit, If the victims in this case don't like their decision then they sue the party they feel is responsible to recover.. If PSU is sued by the victims then the insurance co will be responsible for their defense and costs associated with the defense. PSU as the insured can not accept liability on behalf of the ins co whether they feel they are fault or not.
This post was edited by ShotofEspresso 13 months ago
This drama with the insurance company is just one more example of how the BoT's terrible decisions have compounded exponentially. Erickson, Peetz and Frazier need to resign now. The number for the BoT is 814.865.2521.
Most insurance policies won't pay if there is fraud, gross negligence, criminal conduct, or willful misconduct on the part of the insured or its employees. If this actually goes to trial, this might be an opportunity to get an insight into the BOT's proceedings and how the decisions were made.
The issue doesn't revolve around if PSU was at fault, it revolves around the insurance company changing their terms of the contract in the late 90's. Read this article from last year...
The allegations joining Penn State and its officials with the Jerry Sandusky sexual-abuse cases provide a regrettable study of how we turn to insurance to help us through the worst of situations—at least financially.
Thanks for that article. This is a pretty complicated situation.
After reading that though some of it could be about PSUs fault, which policy is triggered, if things are excluded only for Sandusky or for the whole university, etc...
Ok, maybe I shouldn't have started this topic. I am clearly in over my head with corporate insurance claims.
Since we are on the hook for the Freeh report, implementing the recommendations of the Freeh report, the $60 million fine, and who knows how much in settlements, I guess my question is what happens if the insurance doesn't pay? Where will the money come from?
Not to be a smart ass , but where do you think?
The main hurdle is that 1992 change in the policy. Can PMA deny coverage of PSU for the activities of a non-employee? As you said, it is WAY too complicated. It looks like even the experts aren't sure the way this is going to go.
What I do not like is that Erikson was going around and assuring alumni/student/etc that the insurance company was going to cover costs. There were a few times I was watching the news and they mentioned that "the president says the insurance company will pay its claims." I was relieved to hear that but also questioning it at the time as it was coming from Erikson.
"Whoever’s trying to kill me isn’t getting the job done. But one day, I’m going to punch that f___r in the face."
He absolutely said this. As I said before , I heard an interview when the interviewer asked a question of him if the costs would be paid for in tuition increases. He said the insurance co would cover it.
FWIW, spending is still going on in the university as if they are not worried about it. There is a major systems upgrade that is going to be implemented in the next few years that is full steam ahead right now... I assure you, it's not cheap.
WOW just another misstep in the long list of errors by our leadership. It kills me that the Board would just assume the insurance company would just pay out without any type of fight. Looks like old Rod and the board were pretty cavalier with other companies monies. I think this is going to end very ugly and PSU is going to have to pay.
This is why I think Corbetts suit has merit. Rodney just went to the state Capitol asking the taxpayers for more money. Whether you think the money the university gets from the state taxpayers should be more or less is not the argument. The fact that the university gets any money from the state is the key. Therefore, the actions the university takes has a direct affect on the taxpayers of the state.
Wait for the counter-suit from PSU. It is all a dance and will eventually get settled. It is somewhat of a common practice in the business world.
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