A lost instrument bond is required by the transfer agent, registrar, instrument issuer or lost property office when negotiable securities such as stocks, bonds and miscellaneous commercial paper have been misplaced. The surety bond serves as a guarantee to the issuer or transfer agent that it will not suffer a loss if the lost certificate has been pledged or delivered to a third party who thus holds legal ownership of those securities.
Lost instrument bonds may be written as fixed penalty bonds (written in a fixed amount) or open penalty bonds. Fixed penalty obligations are generally used when replacing a certified checks, money orders or liquidated securities that are held by a state treasurer's escheat or lost property office. Open penalty bonds are used where the value of the lost instrument has a value that may fluctuate with economic market changes. Examples are stocks and bonds issued by publicly traded companies. The surety bond guarantees that if the original instrument is later recovered that it will be voided or returned to the issuer. If the principal negotiates the recovered instrument then the issuer could suffer a loss when the new owners seeks to redeem it.
Lost instrument bonds are pure financial guarantees however they are typically a low loss class of surety bond when the appropriate underwriting protocols are followed. National surety bond leader, SuretyOne.com is a specialist in the bonding needs of transfer agents, Computershare facilities and individuals. For more please call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat. A lost instrument bond is quick, easy and processed immediately.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.