## Facts

- Alea London Limited, a surplus-lines insurer, provided liability coverage to Bono-Soltysiak Enterprises, doing business as Laclede Street Bar & Grill, through a faxed binder effective December 20, 2001.
- The binder stated coverage amounts, premium, and limits and included a single condition: “Excludes Assault & Battery.”
- On January 3, 2002, before any formal policy was issued, a patron fatally stabbed another patron in the insured’s parking lot.
- On January 16, 2002, a formal policy was issued for December 20, 2001–December 20, 2002; it included a liquor liability exclusion and an endorsement containing extensive assault-and-battery-related exclusions.
- The formal policy was never delivered to the insured.
- The decedent’s parents sued the insured for wrongful death.
- Alea undertook the defense and filed an action seeking a declaration of no coverage and, alternatively, reformation to conform the contract to the later-issued exclusions.
- After a bench trial, the court treated the binder as the operative contract at the time of the loss and denied declaratory relief and reformation; Alea appealed.

## Issues

1. Whether the binder or the later-issued policy and endorsements governed coverage for the loss occurring before policy issuance.
2. Whether the binder’s notation “Excludes Assault & Battery” incorporated the later-issued endorsement’s detailed assault-and-battery exclusion language.
3. Whether reformation was available to add or clarify exclusionary terms based on alleged mistake or mutual intent.

## Decision

- The appellate court affirmed the judgment for the insured and wrongful-death plaintiffs.
- The binder controlled at the time of the loss as the temporary insurance contract then in effect.
- The insurer failed to prove that the later-issued, detailed exclusionary endorsement terms were standard in the surplus-lines industry such that they could be read into the binder.
- The trial court did not clearly err in treating the binder’s shorthand assault-and-battery exclusion as insufficient to import the endorsement’s broader, specific language.
- Reformation was properly denied because the insurer did not establish mutual mistake (or other grounds) and there was no evidence the insured participated in any alleged mistake regarding the contract terms.

## Legal Principles

- An insurance binder is an enforceable interim contract; its express terms govern losses occurring during the binder period.
- Later-issued policy terms may affect a binder only to the extent the insurer proves those terms are standard or customary for the relevant coverage in the applicable market.
- Where surplus-lines coverage lacks uniform standard forms and multiple versions of exclusions exist, a brief binder reference to an exclusion may be too indefinite to support incorporation of an unusually expansive endorsement.
- Reformation requires clear and convincing evidence of mutual mistake (or unilateral mistake coupled with fraud or inequitable conduct); an insurer’s unilateral intent to include broader exclusions is insufficient.

## Conclusion

The court upheld coverage under the binder because the insurer did not prove that the later-issued, detailed assault-and-battery endorsement was incorporated into the binder and did not meet the strict requirements for reformation absent evidence of mutual mistake or insured involvement in any error.


Alea London Ltd. v. Bono-Soltysiak Enters., 186 S.W.3d 403 (Mo. Ct. App. 2006)