The Montana charity formerly led by philanthropist and author Greg Mortenson has sued its insurance company for failing to significantly cover legal expenses incurred amid lawsuits over Mr. Mortenson’s memoir Three Cups of Tea and a state inquire into the group’s finances, the Bozeman Daily Chronicle reports.

In a federal suit, the Central Asia Institute contends that Philadelphia Indemnity did not honor its obligations to the charity, paying less than 6 percent of defense costs arising from allegations that Mr. Mortenson fabricated portions of his best-selling book and misused the organization’s funds. In a response filed last week, the insurer said many of the allegations against Mr. Mortenson were not covered by the institute’s policy.

Mr. Mortenson resigned in late 2011 as executive director of the institute, which he founded to build schools in impoverished villages in Pakistan and Afghanistan.