A New York insurer that issued a $1 million liability policy to the Lower Merion School District is balking at the school board's request that it cover any legal costs and payments associated with the civil rights lawsuit challenging the district's secret laptop tracking program.

In a suit filed in federal district court in Philadelphia, Graphic Arts Mutual Insurance Company contends that none of the seven claims made by Harriton High School sophomore Blake Robbins in his invasion of privacy lawsuit amount to "personal injury" as defined in the coverage that the district bought last year.

The company, based in New Hartford, N.Y., is asking a judge to issue such a declaration and release it from paying the claim. The insurer names as defendants the school district as well as Robbins and his parents, Michael and Holly.

Doug Young, a Lower Merion schools spokesman, declined to comment on the case. "The matter is in litigation, has been referred to counsel and appropriate action will be taken," he wrote in an email.

A lawyer representing the Robbinses in their civil rights suit was unavailable for comment. Reached by phone, Bruce Morrison, an attorney representing Graphic Arts Mutual Insurance, said he appreciated "the importance and interest" in the Web-cam case but declined to discuss it publicly.

The insurer's lawsuit, filed last week, raises anew the question of who will pay any legal costs associated with defending the district's now-defunct tracking system.

Attorneys for Robbins' parents and School Board President David Ebby spent four hours in closed-door settlement negotiations on Wednesday with a federal judge, two sources with knowledge of the talks have told The Inquirer. The sources would not say whether or when a possible financial deal could be reached.

After Robbins filed his claim in February, the district disclosed that its employees had remotely turned on the Web-cams and tracking software on the laptops it gave to its high school students about 80 times since September 2008. The system collected nearly 56,000 images, including photos of students and the insides of their homes, as well as screen shots showing their open files, Web sites and online chats.

School administrators began using the software to find lost and stolen laptops. But officials have conceded that in some instances, the tracking continued even after the computers were found.

Contact John P. Martin at 610-313-8120 or at jmartin@phillynews.com.