Most escrow agents limit their liability to one year's fees even if they seriously breach the escrow agreement by revealing your software to others, ie. your trade secret is lost and with it perhaps much of the value of your company. However, reading their escrow agreements one is easily misdirected into believing that is not so.

The language, usually in caps, places a limit on the liability of the escrow agent, then removes that limit if the loss is due to infringement of patent, copyright, trade mark or other proprietary right. But in law, a trade secret is none of the above. Therefore the liability limit is not removed if, for example, an employee of the escrow agent reveals your escrow materials to a competitor.

At Lincoln-Parry SoftEscrow we have no limiting language in our escrow agreements because we understand how devastating the loss of a trade secret could be. It is a leap of naïve faith to place such a valuable asset into the custody of an escrow agency that, in spite of its own fault, stands to lose nothing more than a return of fees paid.

That is why we insist that escrow deposits must be sent to us under seal - not loosely in open containers. We insure they remain under seal through secure storage methods and continuous surveillance. And the results are clear. Since day one, more than thirty years ago, not a single escrow container has gone astray while in our custody. We also maintain a $2 million per incident insurance policy for loss of trade secret - coverage that is unique in the industry.

The misdirection is often carried even further by statements from sales reps that losses are covered by large company wide insurance policies. But insurers are not obliged to pay any more than the escrow agent is liable to pay - and that has been limited by the deceptive language in the escrow agreement to no more than fees paid.

When it comes to handling some of your company's most valuable assets, which would you prefer - an impersonal mega corp in which software escrow is but a small department that faces no exposure if it loses your software, or a specialist of more than thirty years such as Lincoln-Parry that stands to lose as much as you if the job is not done right.