Ever since a Pennsbury school bus ran over 17-year-old Ashley Zauflik nearly five years ago, costing her her left leg, the school district has stood behind a state law that limits its liability to $500,000.

But last week, days after a Bucks County jury awarded the Fairless Hills woman $14 million for her medical costs, pain and suffering, the district revealed that it has insurance that could cover a possible $13 million.

The lawyers for neither side knew about a "$10 million umbrella policy," according to a letter from David S. Cohen, the lawyer who handled the case for Pennsbury, to Zauflik's law firm.

All they knew was that the district had a $1 million policy and went to trial because it wouldn't offer more than $500,000, Zauflik's lead lawyer, Thomas Kline, said Saturday.

"This is a staggering development," Kline said Friday in an e-mail. "I intend to be back before Judge [Robert] Mellon in short order and get to the bottom of this failure to turn over critical information, which [was] hidden from our view and the public view while known to the school board and Pennsbury School District officials."

Kline said he received the letter Friday from Cohen, another Philadelphia lawyer, following an executive session of the school board Thursday night. That's when the district's business administrator told the board, including four newly elected members, about the policies, Cohen said.

"I was able to confirm that there is an excess liability policy with limits of insurance of $10 million for the Pennsbury School District for the policy period of July 1, 2006 to July 1, 2007 with Old Republic Insurance Company," Cohen wrote. "I have been informed that the excess carrier is on notice."

On Jan. 12, 2007, Zauflik and about 16 other students were standing outside Pennsbury High School, waiting for their ride home, when an out-of-control school bus hit them. Zauflik, a junior, suffered the most serious injuries, requiring 11 surgeries, including amputation of her leg.

The accident was caused when the bus driver mistakenly stepped on the gas pedal instead of the brake, Falls Township police and the National Transportation Safety Board determined. The district, however, did not stipulate liability for the crash until the day before jury selection for Zauflik's civil case.

During the four-day trial in Doylestown, Zauflik, now 21, and her parents talked publicly about their ordeal for the first time.

Within hours of the accident, Zauflik was placed in a medically induced coma because of the pain from her crushed pelvis and other injuries. Days later, doctors at the Hospital of the University of Pennsylvania gave her parents a choice, "Take her leg off, or she would die," Marguerite Zauflik testified.

Ashley Zauflik said she does not remember the accident or most of the next 40 days in the hospital. After she came out of the coma, she remembers feeling phantom leg pain. "You feel your leg still. Sometimes, it itches. Sometimes, it feels like your foot's moving. It messes up your head."

She has felt pain every day since she came out of the coma, in all parts of her body, she testified. Mentally, she considers herself "disfigured. I'm not the same any more. I have body issues I never had in high school. I have crutches."

After four days of testimony and lawyers' arguments, the jury awarded Zauflik $2.9 million for past and future medical costs and $11.1 million for pain, suffering, and disfigurement.

But Kline said he expected Pennsbury to appeal the verdict and the judge to "mold" it to $500,000, to comply with a state cap on liability for school districts and municipalities.

To get more than that, Kline said he would need to appeal the adjusted verdict to Superior Court and then the state Supreme Court, which narrowly upheld the cap in 1986.

Kline also appealed to the district "to do what is right and just and fair" and pay Zauflik an amount closer to the jury's award, which would cover the cost of a high-tech prosthesis for the rest of her life.

"The school district is insured for this kind of incident," Kline said after the verdict, "and the insurance is for more than $500,000."

Kline knew about a $1 million policy, but not about the $10 million excess liability coverage.

He also did not know about a $2 million general liability policy, which could apply because of "negligent maintenance of the premises," he said Saturday. That negligence stemmed from the way the buses were lined up outside the school, without barriers to protect the students, he said.

The state cap on damages "was not intended to protect insurance companies from payment of coverages, and, for starters, there is $11,000,000 in coverage for Ashley's claim," Kline said Friday.

The school district is obligated to provide its lawyer "a full and accurate statement"of its insurance policies, and the Zauflik family "is entitled to know what coverages they are entitled to," Kline said.

"In a high-profile case like this, this needs to be investigated - who knew about the policy, when they knew it, and why the information was not turned over to their lawyer, and, in turn, to Ashley Zauflik and her lawyers," Kline said.

The insurance policies should have been discussed not in an executive session, but "in front of the taxpayers who paid for that coverage," he said.

The Zaufliks have reached a settlement with the company that built the bus - the closeness of the gas pedal and the brake was cited by investigators - but Kline declined to disclose the amount. The driver has denied responsibility and was dropped from the civil suit once the district stipulated liability.

Cohen, who was hired by one of Pennsbury's insurance companies to represent the district, could not be reached for comment.

School board member Kathleen Zawacki said she would not comment about ongoing litigation.

"What happens in executive session is confidential," Zawacki said about the meeting that Cohen referred to in his letter. "Let the lawyers handle it."

As for the umbrella policy, she said, "I don't know what coverage the school district has."

Zawacki has been on the board for two years and serves as its assistant secretary.

Contact staff writer Bill Reed at 215-801-2964, wreed@philly.com, and @breedbucks on Twitter. Read his blog, BucksInq, at www.philly.com/bucksinq.