As a result, the estimated cost of British businesses not having escrow could reach hundreds of millions of pounds per year, according to research by escrow provider the NCC Group.
Companies in the FTSE 100 are taking the risk much more seriously though, with 88 of them taking out some form of escrow cover.
Escrow protects a company from risks such as unplanned downtime, loss of system functionality and the sourcing of alternative software solutions.
Under the agreement, a provider enters into an agreement with a software vendor and the licensee to act as third party assuror for software application giving the company access to source code if the software vendor goes into receivership or fails to maintain the software.
Rob Cotton, a director at the NCC said: ‘The fact is that IT systems now form the backbone of business operations and given Escrow is a low cost, high value means of assuring business continuity it is incumbent on managers and directors to take the issue seriously and protect their business critical application.’
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