Larry Goanos
Ahead of the NYC book party event on Tuesday, July 22 at the Sky Room, Advisen conducted an exclusive interview with Larry Goanos, author of a new book about Directors & Officers liability insurance titled “D&O 101: Understanding Directors & Officers Liability Insurance – A Holistic Approach.”
Larry Goanos, an insurance industry veteran who heads independent insurance consulting firm Andros Risk Services LLC, is also the author of the well-received “Claims Made and Reported: A Journey Through D&O, E&O and Other Professional Lines of Insurance.”
D&O 101: Understanding Directors & Officers Liability Insurance – A Holistic Approach
Register to attend the book launch party on Tuesday, July 22 at the Sky Room.
All proceeds go to ClaimsVets.
Advisen: Can you give us a short description of the new book?
Goanos: In general terms, it dissects a typical D&O Insurance policy section-by-section explaining the importance of various provisions and how they may be amended and why. It also seasons these explanations with real-world “war stories” to help illustrate the importance of certain concepts.
Advisen: And why did you write the book?
Goanos: The book begins with a quote from Maya Angelou, “When you learn, teach. When you get, give.” I feel that I’ve learned quite a bit over the years and wanted to share some of it with people who don’t have as much experience with D&O Insurance. And I wanted to share most of my portion of the book’s proceeds with some worthy charities, so that quote addresses both aspects perfectly.
Advisen: Where did you get these war stories from?
Goanos: I accumulated them during my twenty-plus years of working at AIG, Marsh, ACE and Houston Casualty.
Advisen: Can you give us an example of one of these war stories?
Goanos: No, you’ll have to buy the book.
Advisen: Then we won’t continue this interview.
Goanos: OK, you guys drive a hard bargain. By the way, Advisen is mentioned in the book twice. Favorably, of course.
Advisen: Wonderful. The war story please…?
Goanos: Sure, no problem. While I was at AIG in the mid-1990s, I was reviewing an investment advisor account with a novice underwriter. He was seeking $5 million in authority to quote the account. This rookie underwriter had dutifully completed every area of the underwriting worksheet and the account appeared, on paper, to be a pretty good write. At the end of our discussion, I said to him, “Is there anything else that I should know about this company?” And he replied, “Oh yeah, they’re under indictment in Connecticut for allegedly bribing the state treasurer to get the state pension fund’s business.” Of course, I was incredulous. “Why didn’t you tell me this at the beginning of our review?!” I asked. “Well,…” he said,
There was no question about that on the underwriting worksheet.
This, to me, illustrates the fact that you can’t always just color within the lines; sometimes you have to go beyond your standard procedures when underwriting. I firmly believe that there is both an art and a science to underwriting D&O Insurance, especially with respect to the larger accounts. Small program business can be underwritten in more of a cookie-cutter fashion.
Advisen: We hear that there’s a chapter of career advice in the book. Tell us about that.
Goanos: Yes, you have good sources. I solicited career advice from a fair number of senior executives in the insurance industry. I basically asked them to give me one piece of advice that they wish they’d known when they were starting out. I received over 60 responses, about 25 of which are from current or former CEOs, people like Hank Greenberg, Brian Duperreault, and Stephen Way. It’s all in a chapter at the end of the book titled “One Piece of Good Advice.”
Advisen: That’s impressive. What’s your favorite quote?
Goanos: There are many great ones, really. Perhaps the pithiest comes from my friend Giles Stockton, the head of D&O for the Brit Syndicate in London. Giles said: “The one quote that I think always gives good advice to someone entering this business on the underwriting side is this: ‘Don’t let the scent of the premium mask the stench of the risk.’”
Advisen: Besides the chapter on career advice, how does this book differ from other volumes out there about D&O Insurance?
Goanos: Good question. You Advisen employees aren’t all just spokesmodels after all! In my experience, most D&O books are written by practicing lawyers and they focus on important court decisions, which is fine, but I don’t think that provides a lot of guidance for people seeking to learn the business from the ground up. My book is more of an instructional manual in many ways. It provides a lot of practical, as opposed to theoretical, guidance. It’s nice to know the importance of some of the landmark D&O Insurance rulings, but many of those cases have been addressed by subsequent changes to policies and/or procedures and won’t really have a significant day-to-day impact on practitioners.
Advisen: So who is the target audience for D&O 101?
Goanos: Another good question; you guys are on a roll! Not Donald Sterling. We refuse to sell the book to him. Other than that, I’d say anyone who has less than seven or so years of experience with D&O Insurance and would like to learn more about the nuts-and-bolts of it. I’d say that the book would be useful to underwriters, brokers, risk managers, coverage lawyers and even college students studying insurance. Even corporate board members might want to read the book to get themselves up-to-speed on this important coverage which protects their homes and life savings. In fact, I wouldn’t be surprised if savvy brokers buy copies for all of their D&O clients!
Advisen: Nice try on pumping up sales. Now tell us about the glossary.
Goanos: The book contains a glossary of more than 130 terms, many of which you wouldn’t find in a standard insurance glossary, terms such as “evergreen endorsement,” or “blocking the market” or “fee at risk.” If nothing else, I think the chapter of career advice and the glossary alone are worth the price of the book.
Advisen: Which is?
Goanos: Right, the book sells for $33. Ninety percent of my share of the profits will be split equally among six charities: The Go Campaign, Lighthouse International, The Carolyn Sullivan Memorial Foundation, The Danielle Kousoulis Memorial Scholarship Fund, The National Kidney Foundation, and The St. Baldrick’s Foundation. I’m retaining the other ten percent only to cover mailing costs and the cost of purchasing additional books for publicity purposes.
Advisen: Our sources also imply that there’s going to be a book party.
Goanos: Correct. On Tuesday July 22, we’re throwing a book party at a spectacular rooftop venue in Manhattan, the Sky Room. All proceeds from the party will go to ClaimVets, a wonderful charity that helps U.S. Military veterans get jobs in the insurance industry. There will be a lot of people from all areas of the industry at the party, and it’ll be great for networking.
Advisen: Well, it looks like we’re out of time [yawn suppressed], but we’d like to thank you for stopping by to spend a few minutes with us. We wish you all the best with your new book, and the book party, and we hope the charities receive nice checks.
Goanos: Thank you Advisen for affording me this opportunity. And I’m sure all of the charities involved would thank you as well. The first thing I do every morning when I turn on my computer is read my Advisen Front Page News. That’s a great daily source of industry information.
