When to Apply For a Lost Securities Bond

Losing important documents can be stressful and damaging to a business. Itcan ultimately threaten a company’s investment. Luckily, a lost securities bond can help to protect against situations like this. This bond is usually required when a person has damaged, lost, or misplaced an original document. This could be a corporate bond, insurance policy, stock ownership, interest coupon, money order or check or any other important document that also serves as a proof of ownership.

Who can issue a lost securities bond?

You can buy a lost securities bond from a surety company.

What is the purpose of a lost securities bond?

The bond ensures that the issuer of the replacement security (the bank, firm or company that issued the replacement for the lost bond) does not suffer from any economic loss if the original document is found later. It protects the shareholders, transfer agents, and the company from any claims that may surface against the original document in the future.

What kind of penalties are associated with the bond?

There are two types of penalties associated with the bond — fixed penalty and open penalty. Fixed penalty is charged when the value of the original document is fixed, like a cashier’s check. Open penalty is applicable when this value is fluctuating, such as a stock certificate.