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

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

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

Following the plea, the victims of the former teacher filed a civil suit against him and the school board in July of 2019. In August of 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 worth of coverage applies to the Michael Kelly case, $3-million from the Netherlands policy and $1-million from the Peerless policy.

The suit claims the Netherlands policy is 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 for a total of $28-million.

It also names the John Does 1-13 in the civil suit against Michael Kelly. The complaint explains 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 in damages the John Does could receive.

WWAY reached out to the New Hanover County Board of Education for comment and Board Chair Stefanie Adams shared the following statement.

“The Board of Education filed an action seeking to ensure 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 abhorrent. Sexual assault is a trauma no one should endure and has no place in our schools and community.

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

We are now several Boards of Education removed from when these devastating acts took place. Still, the current Board of Education is committed to preventing abuse and providing a safe learning environment for all students. The Board made significant progress in recent years to address awareness and prevention of sexual harassment and abuse and remains fully committed to student safety.

Here are some of the important steps we have taken:

  • Improved reporting tools and multiple ways to report that are accessible 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 header of every page of NHCS website

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

    • Call 910-254-4200

    • Email:  TitleIX@nhcs.net

  • Title IX survey created by the Title IX Committee and approved by the entire Board.  It will be administered to all middle school and high school students during the 2021-22 school year by an independent 3rd party who will also analyze the data and issue a report to the Board.

  • Active Title IX Board Committee

  • New, updated Board policies specifically addressing Title IX compliance:

    • Policy Code: 1720/4030/7235 Title IX Nondiscrimination on the Basis of Sex

    • Policy Code: 1725/4035/7236 Title IX Sexual Harassment – Prohibited Conduct and Reporting Process

    • Policy Code: 1726/4036/7237 Title IX Sexual Harassment Grievance Process

  • New policies and tools to address appropriate use of technology:

    • Policy Code: 3226/4205 Internet Safety

    • Policy Code: 7335 Employee Use of Social Media

    • Policy Code: 3225/4312/7320 Technology Responsible Use

    • Gaggle Student Safety Management Tool

We are dedicated to keeping ALL of our students and staff safe and do not take this obligation lightly.”

WWAY also asked the amount the board pays yearly in insurance premiums. The number shared totals to $1.2-million.

NHCS Insurance Premiums (Photo: New Hanover County Schools)

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