Software Escrow Verification: Why Legal Teams Should Look Beyond Just Having an Agreement 

For legal professionals advising clients on operational resilience and digital continuity, a software escrow agreement is a well-established tool. It ensures that in the event of vendor failure or contractual breach, clients retain access to the source code or cloud environment of their critical software as well as any critical documentation. 

But while setting up a software escrow agreement is a strong first step, legal teams should also consider whether their client would be able to actually use what’s been deposited if the agreement is triggered.  

As their legal representative and advisor, you can add real value by advising your clients on possible approaches to deliver the tangible outcomes they would require in the event of a disruption or failure of a key supplier.  

That’s where software escrow services and verification testing become essential, providing a structured approach to safeguarding business continuity and mitigating risk. 

For any actionable continuity plan to be executed successfully, testing whether the deposited assets would actually function as expected in a software escrow release event is essential.  

In addition, particularly with cloud hosted solutions, there is a range of approaches for software escrow that can be applicable if further support is required following an escrow situation.  

From providing access to the production account, to the provision and access to a secondary vendor-deployed environment or even a fully managed redeployment of the solution during a release event by the software escrow agent. 

Solid Foundation: A Software Escrow Agreement 

Let’s be clear, a professionally managed source code escrow agreement is a valuable safeguard. At The Escrow Company, we work with legal teams around the world to set up straightforward agreements where: 

• The software vendor utilises The Escrow Company’s automated deposit system to regularly deposit up-to-date source code 

• The code undergoes file integrity tests to ensure it’s accessible and is held securely under strict conditions 

• Clients can request a release under predefined trigger events (e.g. insolvency or breach) 

This kind of agreement, like The Escrow Company’s Single Beneficiary Source Code Escrow, provides a legally binding mechanism to access critical software assets if the unexpected happens.  

For many clients, particularly with lower-risk or less complex systems, this may be exactly what’s needed. 

However, legal professionals should also be aware of the next logical question: 

“If the software escrow is released, can the client actually use what they receive?” 

What Software Escrow Verification Adds to the Equation 

Software Escrow verification answers that question by technically validating the deposit to confirm that it’s: 

• Complete, current and fully functioning 

• Buildable (for on-premise solutions) 

• Deployable (for SaaS/cloud solutions) 

• Accompanied by any required credentials, documentation, or instructions 

In other words: verification turns a software escrow agreement into an actionable continuity plan. 

When Is Verification Especially Important? 

While a basic software escrow agreement is a great legal starting point, verification is especially recommended in cases where: 

• The software is mission-critical to daily operations 

• The system is bespoke, complex, or poorly documented 

• Your client operates in a regulated industry (e.g. finance, healthcare, public sector) 

• There are multiple stakeholders who need to demonstrate due diligence 

• The software vendor is a smaller or less-established provider 

• Where the beneficiary wants assurances over the useability and completeness of the deposited materials  

In these scenarios, verification provides reassurance that the deposit is more than symbolic, but it’s usable in a real-world scenario. 

The Passive vs. Active Software Escrow Protection Spectrum 

Rather than seeing software escrow as either “basic” or “verified,” think of it as a spectrum of protection: 

This approach, underlined by The Escrow Company’s various software escrow frameworks, allows legal teams to right-size their protection, starting with a strong foundation and upgrading as risk or complexity increases. 

Software Escrow Verification at The Escrow Company : How We Help 

At The Escrow Company, we understand that legal teams advising clients on software escrow arrangements are seeking not just documentation, but dependable continuity. That’s why we offer a range of software escrow verification services from foundational checks to enterprise-grade technical assurance, designed to confirm that the source code and deployment materials deposited in to escrow are accessible, complete, deployable and usable. 

File Integrity Test – Included Free of Charge with All Agreements 

This basic verification, provided with every software escrow agreement, ensures that the deposited materials are present and readable. It includes checks to confirm: 

• That data resembling source code is present 

• Encrypted files include a working key 

• Compressed files can be decompressed into a logical structure 

• Documentation exists for the required components needed to compile the software 

• While this level of verification doesn’t confirm usability, it’s a great starting point and ensures that something meaningful has been deposited. 

Comprehensive Build Verification 

This advanced service provides legal teams and their clients with independent assurance that the deposited source code can be used to build and deploy the software. 

• The Escrow Company consultant observes and documents the full compilation process remotely 

• The source materials are analysed for readability and completeness 

• Third-party dependencies and environment requirements are recorded 

• The recompiled solution is tested with sample data to confirm it functions as expected 

• Clients also receive a detailed report covering the build environment, steps taken, test outcomes, and the overall usability of the deposit. If feasible, clients can participate in remote testing of the rebuilt solution. 

Cloud Deployment Verification  (For AWS / Microsoft Azure / Google Cloud hosted solutions) 

This level of verification is ideal for clients using cloud-native or hosted solutions. It confirms that all materials, including source code and deployment scripts, are complete and functional. 

• The Escrow Company team observes the vendor performing the build/deployment process 

• Screenshots and documentation capture the full setup and configuration steps 

• Third-party services and dependencies are identified and verified 

• A detailed report is issued confirming that the software escrow deposit can be deployed into a live environment.  If feasible, clients can participate in testing the functionality of the deployed solution 

Code Quality Audit 

A deep dive into the quality and maintainability of the source code designed to give confidence that a third-party developer could realistically take over development in the event of a release. 

This is particularly valuable for clients who may need to assume full technical responsibility post-release or for more bespoke applications. 

SaaS Recovery Verification  (The Escrow Company’s SaaS Recovery service) 

Testing the scale up process of a secondary deployed environment from a scaled down or dormant state, simulating a release and activation process to a workable solution. This verification service allows the client to test the functionality or the secondary system.  

SaaS Release Verification (The Escrow Company’s Managed SaaS Continuity service) 

This is The Escrow Company’s most in-depth verification for live SaaS environments and aligned to our fully managed continuity service. It simulates a full release condition where a SaaS product can be rebuilt independent to the software provider: 

• Verifies that infrastructure-as-code scripts (e.g. CloudFormation, Terraform) can deploy to a clean cloud instance by The Escrow Company team 

• Confirms that databases are functional and data is accessible 

• Includes documentation of every step required to launch the application 

• Clients can test the application in the escrowed environment to validate real-world continuity. 

Mobile App Verification 

Designed for iOS and Android apps, this test confirms that the deposited source code can be used to build a working version of the mobile app locally. 

• Verifies completeness and integrity of the mobile source code 

• This gives clients confidence that mobile app assets are viable if access is ever required. 

Access Credentials Verification 

When included in a software escrow agreement, your client will appreciate assurance that the access credentials supplied by the vendor will provide access to necessary production cloud resources hosted within AWS, Microsoft Azure or Google Cloud.   

The Escrow Company’s Access Credentials Verification process tests the provided usernames and passwords on a periodic basis, ensuring you can access the billing console as a key element in a software escrow event and cloud account transfer process. We can also carry out a supplementary test account transfer to validate the process of moving accounts between owners.  

A Legal Perspective: Why Verification Strengthens Your Advice 

As a legal adviser, you don’t need to validate code yourself. But you do have a responsibility to: 

• Recommend risk mitigation tools that work in practice, not just on paper 

• Help clients comply with emerging third-party risk requirements (e.g. DORA, OCC, CPS230) 

• Ensure that operational continuity is achievable, not just aspirational 

Final Thoughts: Software Escrow That Stands Up in a Crisis 

A software escrow agreement is a smart move. It puts legal protections in place and sends the right message to stakeholders, boards, and regulators.  

Why initiate software escrow unless you have certainty that it’s going to work if called upon?  

By advising clients to consider verification and testing the deposited materials as part of their software  escrow strategy, you’re helping them bridge the gap between legal protection and real-world continuity.  

For clients relying on critical software, especially cloud-hosted platforms, verification adds the operational substance behind that agreement. 

At The Escrow Company, we’re here to support legal teams in offering both: 

• A strong contractual foundation 

• And the optional technical assurance that the deposit materials such as source code will work if ever released. 

If you’re working with clients who need to protect their software assets, talk to The Escrow Company about the right combination of software escrow and verification to suit their risk profile and regulatory obligations.