The Pennsylvania Manufacturer's Association filed a motion in common pleas court saying Penn State did not provide it with information needed to assess the risk the association assumed, CNN reported.
The association has insured Penn State under general liability policies since 1976.
"It would be unlawful and contradictory to public policy to require PMA to provide coverage to PSU under any policy issued to PSU after May 1998 with respect to PSU's concealment of Sandusky's sexually abusive conduct ... and failure to take appropriate action to prevent Sandusky from molesting minors," the motion, filed Wednesday, said.
Former Penn State President Graham Spanier denied a role in a university coverup of Sandusky's actions and has not been charged. But an investigation by ex-FBI chief Louis Freeh said he helped university officials conceal allegations of sexual abuse against the former assistant football coach.
No one from the Pennsylvania Manufacturer's Association was immediately available for comment, CNN said.
A jury convicted Sandusky, 68, in June of 45 of the 48 sexual abuse counts he faced, involving 10 victims. He is scheduled to be sentenced in September.