The insured's claim for reformation of the policy after the business interruption coverage was denied was dismissed by the court. Nat'l Compressor Exch., Inc. v. Hanover Ins. Co. Inc., 2019 N.Y. Misc. LEXIS 6370 (N.Y. Sup. Ct. Oct. 23, 2019). 

    On certain days in June and July of  2013, the insured had no telephone service at its offices. A claim for loss of business income was filed under its commercial property policy issued by Hanover. The insured was compensated with $12,069.88 under the policy. Hanover claimed this was full compensation for what was owed under the policy. The policy contained a 100% co-insurance requirement. 

    The insured sued for breach of contract and reformation of the policy, specifically the 100% co-insurance requirement. Hanover moved to dismiss the reformation count in the complaint.

    The court found that the insured failed to state a claim  for reformation based on mutual mistake. A claim for mutual mistake required allegations indicating that the parties had reached an oral agreement and, unknown to either, the signed writing did not express that agreement. The complaint failed to identify the existence of a single mistake, much less a mutual one. While the insured's president may have unilaterally misunderstood the parties' agreement, this did not provide a basis for reformation.

    Nor did the record disclose any fraudulent or negligent misrepresentation on the part of Hanover. There was no allegation that Hanover was ever requested to change the policy coverage from the 100% co-insurance requirement that was originally provided and existed for many years, to a new policy without the co-insurance requirement. The policies dating back to 2009 all contained the 100% co-insurance requirement. The insured received the policy it ordered and had ample opportunity to correct it after its issuance and before the loss. Accordingly, the motion to dismiss the reformation count was granted.