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


New Hanover District Schools (Image: WWAY)

New Hanover County, NC (WWAY) – The New Hanover County Board of Education has sued several insurance companies over the amount of coverage to be provided to the board in the civil case involving former teacher Michael Kelly.


Michael Kelly is a former New Hanover district school teacher who pleaded guilty to several counts of indecent liberties with a child, indecent liberties with a student, and sexual exploitation of a second-degree minor in June of 2019.

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


The lawsuit against the insurance companies was filed on October 27. They include the names of 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 of coverage applies to the Michael Kelly case, $3 million from the Holland policy and $1 million from the Peerless policy.

The suit alleges that the Holland Policy is obligated to pay damages up to $18 million, Liberty Fire Insurance up to $6 million, Peerless Corporation up to $3 million, and Liberty Insurance Corporation up to $1 million for a total of $28 million.

Also called John Does 1-13 in the civil suit against Michael Kelly. The complaint explains this because John Does are necessary parties interested in the lawsuit. Whatever the judge decides, he will determine what insurance coverage is available to the school board and the amount of damages John can receive.

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

“The Board of Education sued to ensure that it receives the full coverage to which it is entitled under its current insurance policy to support its efforts to resolve ongoing litigation.

The impact of Michael Kelly’s devastation in New Hanover County is abhorrent. Sexual abuse is a trauma that no one should bear and has no place in our schools and society.

The Board of Education respects the privacy of the plaintiffs and will not publicly discuss the details of the ongoing lawsuit. I have confidence in the legal system to eventually find a just solution. The mediation process is ongoing.

We have now been excluded from several boards of education from the time these devastating acts occurred. However, the current Board of Education is committed to preventing abuse and providing a safe learning environment for all students. The Board of Directors has made significant progress in recent years to address awareness and prevention of sexual harassment and sexual assault and remains fully committed to student safety.

Here are some important steps we’ve taken:

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

  • Improved reporting tools and multiple reporting methods accessible to students, staff, parents and the community:

    • Ethix 360 – A secure and anonymous 24/7 reporting system that can be accessed online; Access via the “Report a problem” link located at the header of each page of the NHCS website

    • say something – A 24/7 secure and anonymous reporting system that can be accessed through an online application and via a hotline.

    • Call 910-254-4200

    • Email: TitleIX@nhcs.net

  • Scan the ninth address Created by the Title IX Committee and approved by the entire Board of Directors. It will be managed for all middle and high school students during the 2021-22 school year by an independent third party who will also analyze the data and issue a report to the Board of Directors.

  • Energetic Chapter IX Council Committee

We are committed to maintaining the safety of all our students and staff and do not take this commitment lightly.”

WWAY also requested the amount the council pays annually in premiums. The combined total was $1.2 million.

NHCS Premiums (Photo: New Hanover District Schools)


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