How to Protect Yourself if you lose a Financial Document

A lost instrument bond is surety bond between an owner and a supplying firm to replace an instrument that has been lost or stolen. When any individual or organization is missing a stock certificate, a savings bank book, promissory note, certified check, or a similar document because of theft or because it was misplaced, the issuer will not deliver an acceptable replacement until the owner furnishes a lost instrument bond. If a duplicate document is issued, the original document, if found, will need to be submitted to the surety company.

There are generally two types of lost instrument bonds:

Fixed Penalty bonds are used when the items lost are certified checks, certificates of deposits, or any items with a fixed value.

Open Penalty bonds are used when the items lost are stock certificates or any other items whose market value fluctuates.

Companies provide lost instrument bond services for, initially, one-year but they can later be renewed for multiple years. For professional lenders, the premium is generally 1% of the bonded amount and 2% of the bonded amount for all other applicants.

Summary:

A lost instrument bond is used in the case that a financial document is misplaced or stolen.  Once a lost instrument bond is furnished, and the document is found to be missing, the issuer will replace the initial document.  If the initial document is found, then the owner will need to submit it to the surety company.  There are two different kinds of lost instrument bonds: Fixed penalty bonds and open penalty bonds.

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