In insurance coverage disputes, the only proper entity to bring suit against it is company underwriting subject insurance policy.

The plaintiffs sued Federal Insurance Company, Chubb INA Holdings, Inc. and Chubb Group Holdings, Inc. for denying business interruption coverage, even though Federal Insurance Company was the sole underwriter of the plaintiffs’ policy. After Federal Insurance Company removed the matter to federal court, the plaintiffs attempted to remand the case to state court on the basis that, while the plaintiffs and Federal were diverse (i.e. from different states), the inclusion of the Chubb Companies destroyed diversity. The trial court declined to remand the case, holding that the Chubb Companies were “fraudulently joined” for the purpose of destroying diversity jurisdiction. The trial court went on to state that the only proper defendant in an insurance coverage action is the company who actually underwrote the insurance policy in question and that parent or holding companies should be dismissed in insurance coverage suits. 

This case is a valuable source of authority for the proposition that plaintiffs must only sue the underwriting insurer in insurance coverage disputes and that parent companies, holding companies, subsidiaries, etc. should be dismissed from such actions. 
 

^{Case Law Alerts, 1st Quarter, January 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2022 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}