Many companies find that traditional insurance options neither fit their risk control plans nor their designated budgets. Many insurance companies created alternative plans to meet the needs of particular firms. One of the most popular alternatives is the participatory captive plans. It opens the door to companies who would not otherwise have the funds to create their own captive. One powerful plan was created in 2010: the Delaware series LLC captive solution. This generated great excitement for companies that needed a cost-effective insurance plan tailored to their businesses.
By 2012, the industry saw 179 new Delaware captive structures. These added powerful new tools to other captive solutions including agency captives, rent-a-captives, and risk retention groups. What makes the series structure so attractive is the ability to expand the captive to the locale of the new client. Standard captives are generally single entities with a fixed headquarters. Series structures have the flexibility to host the real estate holdings and other hard collateral in several locales at once, in order to maintain a fiduciary presence in the areas where each client resides.
Delaware series LLC captive structures are modeled on cell-protected captive structures, and enjoy many of the same benefits. Although each cell can take advantage of the financial backing of the entire entity, the individual cells are legally isolated from each other. This allows these advanced structures to localize liability, as well as reduce legal, tax, and operating costs. This makes the series captive structure optimal for a wide range of risk management plans.