Three undefined words in a policy endorsement are at the heart of a lawsuit alleging QBE Specialty Insurance Company shortchanged an insured by $158,743.
Brundage-Bone Concrete Pumping, Inc., a Colorado-based concrete pumping company, filed a suit against QBE on January 15, 2026, in Adams County District Court, Colorado. QBE has since moved the case to the United States District Court for the District of Colorado, where it is docketed as Case No. 1:26-cv-00693.
The dispute turns on what happened after Brundage-Bone canceled its excess liability policy with QBE partway through the coverage term. The policy ran from November 2023 to November 2024, and Brundage-Bone - which had paid its premium in full and filed no claims - canceled effective March 18, 2024, roughly 38% into the term.
QBE returned a portion of the premium, but according to the suit, the insurer kept the rest, calculating the refund using what it called a "short rate basis." That phrase appears in an endorsement to the policy but, the lawsuit alleges, is never defined or explained anywhere in the policy language. The filing describes it as "a three-word mystery."
The numbers sharpen the picture. QBE allegedly retained approximately 44% of the total premium even though coverage was in effect for only about 38% of the policy period - and no claims were ever filed. Brundage-Bone puts the shortfall at no less than $158,743. Adding to its grievance, the suit notes that no other carrier in Brundage-Bone's coverage tower used a short rate calculation when returning premium.
The lawsuit presses three claims. It asks the court to declare QBE's use of the undefined provision unenforceable, arguing it functions as a forfeiture clause - something Colorado law has long disfavored. Alternatively, the suit contends the term should be read against QBE and interpreted on a pro rata basis. It also alleges bad faith, pointing to a Colorado statute that requires insurers to promptly refund all unearned premiums when coverage ends. And it goes further with a civil theft claim, alleging QBE knowingly held on to Brundage-Bone's money even after receiving written notice in November 2025 and refused to return it. Under Colorado law, civil theft can carry treble damages and attorney's fees.
QBE has denied acting unreasonably, denied failing to comply with the policy's cancelation endorsement, and denied committing civil theft. No ruling on the merits has been made, and the case remains in its earliest stages.
For insurance professionals, the case raises a question worth watching: can a cancelation endorsement that references a penalty method without ever defining it hold up under scrutiny? And for brokers and risk managers assembling layered programs, the allegation that only one carrier in the tower applied a short rate calculation is a reminder to look closely at how cancelation terms line up across the stack.
