Glossary

Insured vs insured exclusion

A D&O exclusion removing coverage for claims brought by one insured against another, such as a company suing its own directors.

Also called: IvI exclusion, insured versus insured exclusion, IVI

The insured vs insured exclusion removes coverage for a claim brought by, or on behalf of, one insured against another. In a directors and officers policy that means the company suing a director, a director suing the company, or one officer suing another. Insurers write it for two reasons: to guard against collusive suits designed to turn the policy into a source of funding for the company, and to avoid covering what is, in effect, an internal dispute.

Taken literally, the exclusion can swallow coverage that buyers expect. A trustee in bankruptcy suing the former directors brings the claim on behalf of the company. A shareholder derivative suit is brought in the company's name. Policies handle this with carve-backs, which return coverage for specific situations. Typical carve-backs are derivative claims brought without the assistance of an insured, claims by a bankruptcy trustee, receiver or creditors' committee, whistleblower and employment-related claims, and claims by former directors and officers who left more than a set time before. How courts read the exclusion varies, and wording differences matter.

Check the carve-backs at purchase and renewal, particularly for companies facing financial stress, investors with board seats, or family-owned businesses where disputes between owners are the likeliest claim. Ask the broker for the exact carve-back list in writing. The guide on the The insured vs insured exclusion in D&O policies goes through typical wording, and Directors and officers (D&O) insurance explains the policy.

Last reviewed October 10, 2026

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Related terms

Directors and officers (D&O) insurance Liability insurance protecting a company's directors and officers, and often the company itself, against claims alleging wrongful acts in managing the business. Exclusion A policy provision that removes coverage for specified perils, property, people or types of loss that the insuring agreement would otherwise include. Employment practices liability (EPLI) Claims-made coverage for employee lawsuits alleging discrimination, harassment, wrongful termination, retaliation and similar wrongful employment acts.

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