Prior to mine, all votes were saying, yes, escrow on Bitcointalk works 100%. I don't agree. In my local board alone, I can remember 2 escrows, one reputable across the forum, who kept escrowed money with them when they went inactive all of a sudden. On top of that, even our moderator, an early adopter who also offered escrow services for years, also ran away with huge amounts of borrowed money.
I voted 'would be worse without', but you have to pick the most trusted option.
My question is then, what an escrow service should guarantee? must it be a company or business of any kind to guarantee the service, instead of a single private person?
It guarantees safety of funds, in the first place. Of course, it also guarantees protection to parties involved, which means smooth transactions.
I think it actually doesn't matter whether the escrow is a company or a business entity or a private person. Either way, you have to trust a third party, which could go rogue anytime.
I've heard of smart contract escrows, although these are on alternate blockchains like Ethereum. Being not a technical person, neither can I vouch nor recommend them. However, if these are polished into perfection, it's way better. It's automated, on the blockchain therefore transparent, and objective since it only acts according to the specified conditions.