Also known as: IvI Exclusion · Insured vs Insured · IvI
A D&O exclusion that bars coverage when one insured (e.g., the company) sues another insured (e.g., a director or officer).
The insured vs insured (IvI) exclusion prevents the D&O policy from paying claims brought by one insured party against another—for example, the company suing a former officer, or one director suing another. The exclusion exists to prevent collusive lawsuits designed to trigger insurance payouts. However, it can create real coverage gaps: if the company sues a departing founder or if a new board sues former directors after a change of control, the IvI exclusion may block coverage. Carve-backs (exceptions) are critical—look for carve-backs for derivative shareholder suits, employment claims, and whistleblower actions.
The insured vs insured (IvI) exclusion prevents your D&O policy from covering claims when one insured party sues another—for example, when a founder sues a co-founder or the company sues a director. This exclusion exists to prevent collusive lawsuits. However, carve-backs for derivative shareholder suits and employment claims are essential to preserve meaningful coverage.
The insured vs insured exclusion prevents policyholders from manufacturing claims by suing themselves. Insurers added this exclusion to stop companies and their insiders from colluding to trigger coverage. However, legitimate third-party claims like derivative shareholder suits need carve-backs, or the policy becomes nearly useless. Always negotiate carve-backs for derivative actions, employment claims, and whistleblower suits.
Carve-backs are exceptions to the insured vs insured exclusion that restore coverage for legitimate claims. Essential carve-backs include derivative shareholder suits (where shareholders sue on behalf of the company), employment claims, and whistleblower actions. Without these carve-backs, most D&O claims wouldn't be covered. Startups should negotiate these carefully, especially for derivative and employment matters.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.