Why You Need Lost Securities Bond

A lost securities bond is required by banks or other financial institutions to protect against a lost instrument. The bond is required when the original document is lost, stolen or destroyed. The bond acts in lieu of the original document. It promises the bond issuing agent that the buyer will reimburse the amount if the original is found and then sold, transferred or traded.

There are several important reasons for getting a lost securities bond:

It can save the investor from disastrous losses. Financial instruments are usually bought for investment purposes. For many people, it could be their life’s savings. A lost or destroyed bond, therefore, means a disastrous loss for the buyer. A bond is often the only solution to see that the value is not lost.

It protects the institution or the agency issuing the instrument. What happens if the original document is found later and sold, transferred or traded? The bond promises the issuer that the amount would be reimbursed if any such incident happens.

Lost securities bond keeps the public trust in the reliability of financial instruments like stocks, checks, and other financial certificates. When people know that they can recover from any such accidental loss, they are more likely to invest in such financial instruments.