The insurance company said that Penn State made a claim for coverage and defense of the lawsuit filed in November by a plaintiff referred to as Doe A, who alleges that he was sexually abused by Sandusky, the former Penn State assistant football coach, between 1992 and 1996.
The company said that three insurance policies are at issue, and that the only one that may cover the university is one that was effective from March 1, 1991, to March 1, 1992.
The company argues that for coverage to apply, the abuse must have started while the policy was effective. However, if it is revealed that the university engaged in "intentional conduct" that led to the abuse, then the insurance company is off the hook, the complaint says.
Doe A, now 30, is suing Penn State, Sandusky, and the Second Mile, a charity founded by Sandusky for at-risk youth.
"We believe that the lawsuit is without merit and will defend our rights under our insurance policies," said Annemarie Mountz, a Penn State spokeswoman.
The insurance company is being represented by the Philadelphia law firm of Kleinbard, Bell & Brecker. Steven J. Engelmyer, an attorney at the firm, declined to comment on the case.
Contact staff writer Robert Moran at 215-854-5983, firstname.lastname@example.org, or @RobertMoran215 on Twitter.