If the coverage decision is clear, there is no need to file a declaratory judgment suit. An insured files a declaratory judgment action against their insurer and names an injured third party who shares citizenship with the insured.Courts have traditionally held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination. A declaratory judgment is a court-issued judgment that defines and outlines the rights and obligations of each party in a contract. To establish federal jurisdiction in a declaratory judgment action, two conditions must be satisfied. First, is the constitutional inquiry. Do you name the plaintiff in the underlying liability suit as a party in the coverage declaratory judgment action? Watch the video to find out what is a declaratory judgment action My Business is to Protect your Business.