In a declaratory judgment, the insurer may ask the court to determine whether or not the accident in question is covered under the policy. A declaratory judgment defines the relationship between each party and their rights.It is typically made before filing a lawsuit. An insured files a declaratory judgment action against their insurer and names an injured third party who shares citizenship with the insured. This addresses those issues specific to a declaratory judgment action involving insurers and insureds. Tags: Declaratory Judgment, Declaratory Judgments, General Liability, Mountain Express Oil Company, Southern Trust Insurance Company. An insurance defense attorney has many tools at their disposal to address legal issues. The case, Atlantic Specialty Insurance Company v. Borchard, The Declaratory JudgmentA Needed. Procedural Reform, 28 YALE L.J. 1, 4 (1918) ("In a sense all judgments of courts declare jural.