If you have lost a cashier's check, a certificate of deposit, a stock certificate, or a similar financial document, the institution that issued it usually will not simply hand you a replacement. They want protection in case the original turns up later and someone tries to cash it. That protection is a lost instrument bond. Here is what it is, when you will be asked for one, how much it costs, and how to get your replacement moving.
A lost instrument bond guarantees that if the lost or stolen document resurfaces, the issuing institution will not take a loss for honoring it. When a bank reissues your $10,000 cashier's check, it now faces the risk that both the original and the replacement get cashed. The bond shifts that risk to a surety. If the original is cashed and the bank suffers a loss, the surety covers it — and you, having signed an indemnity agreement, reimburse the surety. That indemnity is exactly why banks will accept the bond instead of holding your money for years.
The most common triggers are a lost or stolen cashier's check, a missing certificate of deposit, or a misplaced stock or bond certificate. Before reissuing, the financial institution or transfer agent typically requires a lost instrument bond as a condition of replacement. It is a routine request, not a sign that anything is wrong with your claim.
Lost instrument bonds come in two flavors. A fixed penalty bond is used when the lost item has a set value — a cashier's check or a CD, for instance. An open penalty bond is used when the value can fluctuate, like a stock certificate whose price moves with the market; it accounts for the possibility that the instrument is worth more if and when it reappears. Knowing which type applies helps set expectations on both amount and cost.
There is no statutory minimum or maximum — the bond amount is based on the value of the instrument. For a lost $10,000 cashier's check, you would typically request a $10,000 bond, though some issuers require an amount up to 1.5 times the value to add a cushion. Premiums generally run about 1% to 2% of the bond amount, with a common minimum cost in the range of $100 to $150. One nice feature: a lost instrument bond usually does not renew — you pay the premium once at issuance and it stays in force.
To get the bond, you sign an indemnity agreement pledging to repay the surety for any loss. In plain terms, if you were to cash both the original and the replacement, you would be on the hook for it. For an honest applicant who simply misplaced a document, this is a formality — but it is also why you should be confident the original is truly gone, not just temporarily out of sight.
Have the instrument type, its value, and the issuer's requirements ready, and work with a surety that handles lost instrument bonds routinely. Jurisco has issued lost instrument bonds nationwide since 1987. Founded by an attorney, the team understands the paperwork that banks and transfer agents expect and can often turn a straightforward bond around quickly, so your replacement is not held up.
Why does the bank require a lost instrument bond?
To protect itself if the original document is found and cashed after a replacement has been issued.
How much is the bond?
Usually the value of the instrument, sometimes up to 1.5 times that, with premiums around 1% to 2%.
Does it renew every year?
No. You typically pay once at issuance and the bond stays in force.
What if the original turns up?
You must not cash it. Under the indemnity agreement, you would be responsible for any resulting loss.