A Florida staffing company is taking Chubb and its related companies to federal court, accusing the insurer of making unfair financial demands and mishandling claims after a decade of working together.
Full Steam Staffing, which operates mainly in California, filed a lawsuit on October 14 in the U.S. District Court for the Central District of California. The company claims that problems began when it decided to switch insurance providers for its workers’ compensation coverage, which had been with Chubb and its affiliates since 2015.
The insurance relationship started with ACE Limited, which became part of Chubb after a massive $28.3 billion merger in 2016. For ten years, Full Steam relied on Chubb’s workers’ compensation insurance while staffing mostly light industrial and factory jobs. California accounted for the largest part of their payroll exposure.
The complaint says issues arose when Full Steam planned to end its contract with Chubb. Chubb initially asked for more than $12.5 million in collateral to renew the policy for another year. This included $1.7 million to settle accounts from the previous year and almost $11 million as a safety cushion for future claims. When Full Steam hinted at moving to a new insurer, Chubb lowered the request slightly to $11.5 million.
After Full Steam confirmed it was leaving, Chubb raised its demands even higher. The insurer already held nearly $29.4 million in cash from Full Steam for future claim payments but then insisted that this cash be replaced with a letter of credit that would just sit unused. Chubb also required Full Steam to keep paying monthly claim costs, which ran close to $1 million each month in July and August 2025. On top of that, Chubb demanded another $22 million in collateral, pushing the total to over $51 million while monthly claim payments continued.
Full Steam argues these extra demands were not based on real insurance needs. Instead, they say Chubb aimed to punish them for leaving and lock up their money. The insurer pointed to “Program Agreements” or “side agreements” that supported these collateral rules. However, Full Steam claims these agreements were never filed with California regulators as the law requires and include arbitration and venue clauses they say don’t apply in California.
The lawsuit also targets ESIS, Inc., which manages Chubb’s claims. Full Steam accuses ESIS of poor claims handling — things like not investigating claims properly, setting reserves too high, making incorrect payments, and generally mismanaging claims. According to Full Steam, this increased their insurance costs and collateral demands.
Full Steam wants a court ruling declaring the program agreements and arbitration clauses invalid for California-related claims. They’re also seeking a refund of all money paid under those agreements, compensation for Chubb’s bad faith in handling the relationship, and damages for ESIS’s alleged negligence.
The company says it has done everything it was supposed to do, including paying premiums and providing collateral on time. Their California payroll has more than doubled from $60 million in 2015 to about $143 million in 2024, showing business growth during their time with Chubb.
The claims are still allegations, and the case is set to continue in federal court. This dispute shines a light on the sometimes tense clashes between businesses and insurers, especially when long-standing agreements come to an end.