New Hanover Board of Education sues insurance companies for cover in Kelly case



NEW HANOVER COUNTY, NC (WECT) – The New Hanover County School Board has taken legal action against several of its insurance companies over a dispute over the coverage the companies will provide to the board in the case involving former teacher Michael Kelly. Kelly is in jail after pleading guilty in 2019 to nearly 60 charges of sex crimes, including sexual exploitation of minor and indecent freedoms with a student and indecent freedoms with a child.

The school board is one of the defendants in a civil lawsuit brought by people Kelly victimized while teaching in New Hanover County schools. The council brought legal action against The Netherlands Insurance Company, Peerless Insurance Company, Liberty Insurance Corporation and Liberty Mutual Fire Insurance Corporation. The defendants listed are also “John Does 1-13”, the plaintiffs in the civil action against the school board, Kelly, former Superintendent Tim Markley and former Assistant Superintendent Rick Holliday. The “John Does 1-13” are included as defendants in the school board’s action against the companies because the lawsuit specifies that they are “necessary parties interested in the outcome of this action” as it could determine damages recoverable by law.

The new lawsuit says insurance companies have taken the position that only $ 4 million in coverage applies to the school board in the Kelly case. The board maintains that claims triggering corporate coverage cover policies over multiple years and are expected to result in a larger amount. School board requests Netherlands insurance company to pay up to $ 18 million in assessed loss or damage to school board in civil action, Liberty Fire Insurance Corporation pay up to $ 6 million dollars, Peerless Insurance Company pays up to $ 3 million, and Liberty Insurance Corporation pays up to $ 1 million, for a total of $ 28 million in coverage.

WECT has requested copies of annual insurance premiums paid by New Hanover County schools. The summary showed a total of over $ 1.2 million.

Annual insurance premiums paid by NHC schools(WECT)

New Hanover County School Board President Stefanie Adams released the following statement regarding the lawsuit against the insurance companies:

“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 reach a just resolution. The mediation process is ongoing.

We are now several school boards far removed from the time 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 Council has made significant strides in recent 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:
  • Changing borders training for students in grades 6 to 8
  • Bring in the spectator program for high school students
  • More than 3,000 employees received the obligation From darkness to light coaching
  • All board members have received specific training on how to manage Title IX appeals
  • Robust Title IX Department:
  • A highly qualified Title IX coordinator, who is a lawyer specializing in the field
  • A dedicated Title IX investigator which reports to the Title IX coordinator
  • Information sheet Title IX
  • 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
  • E-mail: [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
  • Title IX Looking back
  • New updated Board policies specific to Title IX compliance:
  • Policy Code: 1720/4030/7235 Title IX Non-discrimination 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 Grievance procedure for sexual harassment
  • New policies and tools to address the appropriate use of technology:
  • Policy Code: 3226/4205 Internet security
  • Policy Code: 7335 Use of social media by employees
  • Policy Code: 3225/4312/7320 Responsible use of technology
  • Herd Student Safety Management Tool

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

WECT will continue to update this story as more information becomes available.

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