If you’re delivering software or SaaS to enterprise clients, escrow is no longer just a “check-the-box” requirement—it’s a competitive advantage. Done right, it helps you protect your intellectual property, close more deals, reduce liability, and dramatically lower internal overhead.
But not all escrow vendors are built for modern software development.
This guide outlines the 8 essential questions every software vendor or SaaS company should ask before choosing an escrow provider. These questions help you ensure that your escrow solution is secure, automated, efficient, cost-effective, and legally sound.
Key Terms for Software Depositors
Term | Definition |
Depositor | The software or SaaS provider placing IP into escrow. |
Beneficiary | Your client who may receive escrow materials under contractually defined conditions. |
Escrow Deposit | The source code, documentation, data, or deployment assets held by the escrow agent. |
Automated Escrow™ | PRAXIS’ integration that automatically pulls updates from GitHub, GitLab, Bitbucket, or Azure DevOps. |
Infinite Retention™ | A policy that stores every version of escrow deposits forever—never deleted or overwritten. |
Technical Verification | Testing that ensures escrow deposits are complete, buildable, and deployable. |
SOC 2 Compliance | A data security standard for service providers, focused on confidentiality, integrity, and availability. |
Section 365(n) | U.S. bankruptcy law ensuring your clients can continue using your software during bankruptcy. |
E&O Insurance | Errors & Omissions insurance covers financial loss due to professional mistakes or negligence. |
1. Do You Maintain SOC 2-Level Security to Protect Our IP?
Why it matters:
Your escrow vendor will hold highly sensitive materials—your proprietary source code, keys, build tools, and possibly even client data. Their controls must align with enterprise-grade expectations.
Ask:
- Are your systems aligned with SOC 2 Trust Services Criteria?
- Are all deposits encrypted in transit and at rest?
- Do you monitor and restrict access internally?
Security failures at your escrow vendor can expose you to customer loss, legal action, and reputational damage.
2. Do You Offer Automated Escrow from GitHub, GitLab, or Bitbucket?
Why it matters:
Manually sending files to escrow via email or FTP is risky and resource-intensive. It puts pressure on your DevOps or engineering teams and increases the chance of out-of-date or incomplete deposits.
Automated Escrow™ advantages:
- No manual uploading.
- Compliance made easy! “Set it and forget it!”
- No risk of human error or skipped deposits.
- Lower cost and effort—fully integrated into your development process.
Reduce internal costs by up to 90% and ensure your escrow account is always accurate and current.
3. Do You Retain All Escrow Versions with Infinite Retention™?
Why it matters:
Overwriting the latest version or deleting older deposits creates serious legal and technical risk. If the most recent version fails, you want access to a known working version.
Why Infinite Retention™ matters:
- Every version is stored, forever.
- No version is deleted or replaced—ever.
- Restores can be made from any point in your release history.
Infinite Retention™ is standard at PRAXIS—because business continuity demands it.
4. Can You Verify That Deposits Are Complete and Functional?
Why it matters:
If your escrow materials are released, they need to work. Your reputation (and legal risk) depends on it.
Technical Verification helps you:
- Ensure completeness of your deposit.
- Build and test your software from scratch.
- Confirm dependencies, instructions, and configuration files are included.
Verified deposits close deals faster and eliminate disputes later.
5. Can You Escrow SaaS Data, API Keys, and Offer a Recovery Environment?
Why it matters:
For SaaS applications, source code is just part of the picture. Customers may need user data, system configurations, and secure credentials to maintain operations in a failure event.
SaaS continuity escrow should include:
- Databases or anonymized data replicas.
- Credentials, tokens, and infrastructure templates.
- A preconfigured Recovery Environment as a failover option.
Full-stack SaaS escrow helps you meet client continuity requirements without giving up control.
6. Are You a U.S.-Based Escrow Agent Familiar with Section 365(n)?
Why it matters:
Escrow is not only technical—it’s legal. In the U.S., Section 365(n) of the Bankruptcy Code protects software licensees, allowing them to continue using licensed software even if the vendor files for bankruptcy.
Why U.S. jurisdiction is best:
- 365(n) guarantees license continuation rights for your clients.
- U.S. courts offer the most robust IP and licensing protections.
- Global clients prefer U.S.-based agents for enforceability.
Your escrow agreement is only as enforceable as the jurisdiction behind it.
7. Do You Carry Errors & Omissions (E&O) Insurance—and How Are We Protected?
Why it matters:
Mistakes happen. If your escrow agent loses, mishandles, or mis releases your IP—or simply fails to act—E&O insurance provides a financial safety net.
What to ask:
- Do you carry dedicated E&O insurance?
- What’s the coverage limit?
- Is your escrow service fully covered?
PRAXIS maintains $2 million in E&O insurance, giving you and your customers added protection and peace of mind.
8. Are You a Neutral Third-Party Technology Escrow Specialist—Not a Law Firm or Bank?
Why it matters:
Only a neutral, independent, professional technology escrow provider can meet the legal, technical, and business needs of both parties in an escrow agreement. Law firms and banks lack the technical capacity, neutrality, and tooling for modern software escrow.
Risks of law firms or banks:
- Law firms may represent one party—creating a conflict of interest.
- Banks treat escrow like a document repository—not a continuity mechanism.
- Neither is equipped to interface with Git repositories or validate technical materials.
Why you want a specialist:
- Neutrality ensures fair release decisions.
- Technical infrastructure supports Git-based, cloud-native, and SaaS models.
- Verified, secure handling of code, data, and credentials.
Choose a true escrow partner—not a file cabinet.
Final Checklist: The 8-Point Depositor’s Escrow Evaluation
Key Question | Why It Matters | ✔️ |
Do they operate with SOC 2-aligned security controls? | Protect your IP and meet client security needs. | |
Do they support Automated Escrow™ from source control platforms? | Reduce cost and eliminate human error. | |
Do they retain all versions via Infinite Retention™? | Provide rollback protection and complete history. | |
Can they verify escrow contents function as expected? | Prevent disputes and ensure readiness at time of release. | |
Can they escrow data, credentials, and SaaS environments? | Meet full SaaS continuity expectations. | |
Are they U.S.-based and familiar with Section 365(n)? | Ensure legal enforceability under U.S. law. | |
Do they carry Errors & Omissions insurance? | Protect all parties from escrow-related risk. | |
Are they a neutral, professional technology escrow provider? | Guarantee impartiality and technical readiness. |
About PRAXIS Technology Escrow
PRAXIS is a U.S.-based, independent escrow agent serving software and SaaS providers worldwide. Our solutions are designed to reduce legal risk, increase operational efficiency, and help vendors close deals faster.
We offer:
- Automated Escrow™ from GitHub, GitLab, Bitbucket, and Azure DevOps
- Infinite Retention™ for complete archival assurance
- Technical Verification Services
- SaaS Escrow & Recovery Environments™
- $2 Million in E&O Coverage
- Impartial, U.S.-Jurisdiction Agreements