A recent The Legal Intelligencer story, “Penn State Sues Insurer for Defense Costs, Asks for Jury,” reports that Penn State University has sued its insurance company following the insurer’s own legal action to limit its coverage in a lawsuit against the university stemming from the Jerry Sandusky sex abuse scandal.  According to reports, as of December 31, Penn State has paid a total of nearly $3.2 million to outside lawyers, consultants, and public relations advisers hired to address the sex abuse scandal.

In a 12-page complaint filed in Centre County Common Pleas Court, Penn State argued three counts of breach of contract and one bad faith county against Pennsylvania Manufacturers’ Association Insurance Co (PMA).  Namely, the school said the insurer breached its contract with the university by refusing to cover Penn State’s defense of Doe A v. Second Mile and refusing liability coverage for any damages in that suit.

“PSU has been damaged by PMA’s breach by, among other things, being denied the benefits of the insurance coverage for which it contracted, that are required by law, and for which PMA collected substantial premiums, and PSU has been forced to incur the substantial burden and expense of bringing and pursuing this action,” the complaint said.