All About Lost Securities Bonds
What do you do if you lose an important financial instrument like a check, bond or stock certificate? These kinds of documents carry significant value, and in some cases, a person’s entire financial security. Should one be penalized for an unintentional error? To protect against this kind of misfortune, lost securities bonds are put in place.
What is a Lost Securities Bond?
When approaching legal institutions for replacement of any of the above-mentioned documents, you will most likely be asked to present your lost securities bond. The bond is required by banks and other financial institutions when paying against a lost, damaged, stolen or misplaced financial instrument. Examples of these financial instruments may include life insurance policies, bank checks, money orders, stock certificates, mortgage documents, and interest coupons.
Why do we need Lost Securities Bond?
To protect the interests of the general public: A person can lose an important financial document by carelessness, damage, or theft. Since this is not uncommon, the bond ensures that people are not penalized or face heavy losses if that happens.
To protect the interests of the financial institution: The bond protects the institution against any loss if the original documents are found later. This protects the institution from any fraudulent claims.