Anyone who has rented an apartment surely paid a security deposit to cover damages. Escrow in our industry works basically the same. It is money held in the event it is needed to cover freight damage, vehicle damage, property damage or failure to return company owned equipment such as Omnitracs, load bars and straps.
Another example is company’s trucks requiring a pet deposit. When the truck is returned and there is no damage the deposit is returned usually without any interest. Money being held by a third party until certain conditions are met are very common.
Personally, I wish our Escrow was a little higher as it is not enough to cover what we could be charged if in the worst-case scenario our truck was totaled while under a load. When all of the chips are down, getting hit with an astronomical bill to cover freight damage, OmniTracs damage, as well as no truck would be worse than a kick in the stomach.
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Another example is company’s trucks requiring a pet deposit. When the truck is returned and there is no damage the deposit is returned usually without any interest. Money being held by a third party until certain conditions are met are very common.
Personally, I wish our Escrow was a little higher as it is not enough to cover what we could be charged if in the worst-case scenario our truck was totaled while under a load. When all of the chips are down, getting hit with an astronomical bill to cover freight damage, OmniTracs damage, as well as no truck would be worse than a kick in the stomach.
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