NHCS claims insurance companies should pay millions more in cover in Kelly case

NEW HANOVER COUNTY, N.C. (WWAY) – The New Hanover County School Board has filed a lawsuit against multiple insurance companies over the amount of coverage that will be provided to the board in the civil case involving the former teacher Michael Kelly.

Michael Kelly is the former New Hanover County Schools teacher who pleaded guilty to multiple counts of indecent liberty with a child, indecent liberty with a student, and second-degree sexual exploitation of a minor in June 2019.

Following the plea, the former teacher’s victims filed a civil suit against him and the school board in July 2019. In August 2021, attorneys amended the complaint to add new claims against Kelly.

The lawsuit was filed against the insurance companies on October 27. It names The Netherlands Insurance Company, Peerless Insurance Company, Liberty Insurance Corporation and Liberty Mutual Fire Insurance Company. The board says the companies say only $4 million of cover applies to the Michael Kelly case, $3 million from the Dutch police and $1 million from the Peerless policy.

Lawsuit says Dutch police obligated to pay damages up to $18 million, Liberty Fire Insurance Company up to $6 million, Peerless up to $3 million, Liberty Insurance Corporation up to $1 million dollars for a total of $28 million.

He also names the John Does 1-13 in the civil lawsuit against Michael Kelly. The complaint explains that this is because the John Does are necessary parties who are interested in the lawsuit. Whatever the judge decides will determine the insurance coverage available to the school board and the amount of damages John Does may receive.

WWAY has reached out to the New Hanover County School Board for comment and board chair Stefanie Adams shared the following statement.

“The school board has filed an action seeking to ensure that it receives the full coverage to which it is entitled under its existing insurance policy to support its efforts in resolving ongoing litigation.

The trail of devastation left by Michael Kelly in New Hanover County is heinous. Sexual assault is a trauma that no one should experience and has no place in our schools and community.

The Board of Education respects the privacy of complainants and will not publicly discuss the details of the pending litigation. I have faith in the legal system to ultimately reach a just resolution. The mediation process is ongoing.

We are now many school boards away from when these devastating acts took place. Yet the current school board is committed to preventing abuse and providing a safe learning environment for all students. The Board has made significant progress over the past few years in raising awareness and preventing sexual harassment and abuse and remains fully committed to student safety.

Here are some of the important steps we have taken:

  • In-depth training for students, employees, administrators and board members:

  • Enhanced reporting tools and multiple ways to report that are available to students, staff, parents, and the community:

    • Ethix 360 – Secure, anonymous 24/7 reporting system accessible online; access via the ‘Report a Concern’ link on the header of every page of the NHCS website

    • Say something – Secure and anonymous reporting system accessible 24/7 via an app, online and via a hotline.

    • Call 910-254-4200

    • Email: [email protected]

  • Title IX Investigation created by the Title IX Committee and approved by the full Board. It will be administered to all middle and high school students in the 2021-22 school year by an independent third party who will also analyze the data and provide a report to the Council.

  • active Title IX Board Committee

We are committed to the safety of ALL our students and staff and do not take this obligation lightly. »

WWAY also asked how much the board pays out each year in insurance premiums. The number shared totals $1.2 million.

NHCS insurance premiums (Photo: New Hanover County Schools)

Kristan F. Talley