Originally Posted by LFS
On the insurance subject: I am involved in running a non-profit that includes a preschool. As you can imagine, we have lots of insurance for stuff, including if one of our teachers Sanduskies. Each year when we renew the policy we have to stipulate that we're following certain guidelines (many of which are required for licensing anyway) like doing background checks on employees working with kids. We also have to have established policies for this stuff - as an example, a teacher is never supposed to be alone in a room with a single student.
Impossible to guess exactly what PSU agreed to do when they got their liability insurance, but you have to imagine they agreed to some method of keeping something like this from happening. If the evidence does indeed turn out to suggest/prove that the leadership shat the bed on this as badly as has been reported, I would think the insurance company will have a pretty good case for not being stuck with the bill.
PSU is stuck between a rock and a hard place with respect to their liability insurers. If PSU ultimately fails to shift the cost of victim settlements off onto their insurers, they'll wind up having to pay the claims from their endowment. That is likely to enrage alumni and donors who didn't envisage their money going to pay off victims of a child rapist. The insurers, for their part, can't be blamed for trying to get out of paying the claims - especially if it can be proven that they were intentionally (and deceitfully) lied to and misled concerning Sandusky. Considering what has come out in these recent emails, it will be interesting if the insurer's lawsuit against PSU actually goes to trial.
Shivers must have went up the spines of PSU administrators and their insurers when Sandusky was found guilty on 45 counts. That is twelve men and women reaching a unanimous verdict against Sandusky - and by inference PSU - on 45 counts of criminal conduct. The burden of proof is less demanding in civil court, so it's suddenly obvious why PSU is issuing a public statement inviting the victims to join them in a "dialogue" aimed at furthering communication between the parties. A cynic like me might speculate that this "dialogue" is intended more as a feeling out process to try and get an idea of how little - or how much - the victims might be willing to settle for and whether PSU would be better off to go ahead and take their chances with a jury. (If the lawyers representing the eight victims demand $50 million [each] to avoid going to trial, PSU may decide to go ahead and roll the dice ...)
PSU's legal strategy can be summed up in a single phrase: "The goal now is to limit damage from payouts to an absolute minimum." PSU probably has some of the best lawyers in the country - along with a contingent of public relations advisors - counseling them on how best to go about achieving that goal.