NHCS Says Insurance Companies Should Pay Millions More in Kelly Case


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NEW HANOVER COUNTY, NC (WWAY) – The New Hanover County School Board 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 who pleaded guilty to several counts of Indecent Freedoms with a Child, Indecent Freedoms with a Student, and Second Degree Sexual Exploitation of a Minor in June 2019.

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

The lawsuit was filed against the insurance companies on October 27. These are the Dutch Insurance Company, Peerless Insurance Company, Liberty Insurance Corporation and Liberty Mutual Fire Insurance Company. The board says the companies say only $ 4 million in coverage applies to the Michael Kelly case, $ 3 million from the Dutch policy and $ 1 million from the Peerless policy.

The lawsuit claims that the Dutch police are obliged 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.

He also names John Does 1-13 in the civil action 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’s decision, it will determine the insurance coverage offered to the school board and the amount of damages that John Does could receive.

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

“The Board of Education has filed an action to ensure that he receives the full coverage to which he is entitled under his existing insurance policy to support his efforts in resolving outstanding disputes.

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 our community.

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

We are now several school boards far removed from the time when these devastating acts took place. Nonetheless, the current school board is committed to preventing abuse and providing a safe learning environment for all students. The Council has made significant progress over the past few years to raise awareness and prevent sexual harassment and abuse and remains fully committed to student safety.

Here are some of the important steps we have taken:

  • Extensive training for students, employees, administrators and board members:

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

    • Ethix 360 – Secure and anonymous 24/7 reporting system accessible online; accessed through the “Report a Concern” link on the header of every page of the NHCS website

    • Say something – Secure and anonymous 24/7 reporting system accessible via an application, 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 entire Board. It will be administered to all middle and high school students during the 2021-22 school year by an independent third party who will also analyze the data and submit a report to the Board.

  • active Title IX Committee of the Council

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

WWAY also asked for the amount the council pays each year in insurance premiums. The number shared stands at $ 1.2 million.

NHCS Insurance Premiums (Photo: New Hanover County Schools)

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