An indemnity bond form is the contract you sign to get a bank, corporation, or other issuer to replace a lost, stolen, or destroyed document such as a cashier’s check or stock certificate. The form names you as the principal, the institution as the obligee, and a surety company as the financial guarantor, and it promises that if the original document resurfaces and causes the institution a loss, the surety will pay and then collect from you. You get the form from the institution that needs the bond or from the surety company that underwrites it, and completing it means gathering documentation about the missing item, paying a premium, and signing before a notary.
When You Need an Indemnity Bond
The most common trigger is a lost cashier’s check. Banks won’t simply void the old check and cut a new one, because someone could still present the original. Under UCC Section 3-309, a court cannot order payment on a lost instrument unless the person required to pay is “adequately protected” against a future claim from another holder.1Legal Information Institute. Uniform Commercial Code 3-309 – Enforcement of Lost, Destroyed, or Stolen Instrument An indemnity bond is the standard way to provide that protection, and the Office of the Comptroller of the Currency confirms banks require one for the amount of a lost cashier’s check before issuing a replacement.2HelpWithMyBank.gov. Why Do I Need an Indemnity Bond to Replace a Lost Cashier’s Check?
Lost or stolen stock certificates are the other major situation. Under UCC Section 8-405, a company that issued certificated securities must provide a replacement if the owner files a “sufficient indemnity bond” and meets other reasonable requirements the issuer sets.3Legal Information Institute. Uniform Commercial Code 8-405 – Replacement of Lost, Destroyed, or Wrongfully Taken Security Certificate The bond protects the issuer and transfer agent against the risk that the original ends up in the hands of an innocent purchaser, which would otherwise create double liability.4Investor.gov. Updated Investor Bulletin: Lost and Stolen Securities
Beyond checks and stock certificates, indemnity bonds also come up when a deed is missing from the public record and a title company or buyer needs coverage to close, when a personal representative distributes estate assets without certain probate documents, and when other financial instruments like money orders, certificates of deposit, and corporate bonds need replacing.
U.S. Savings Bonds Are Different
If you lost a U.S. savings bond, don’t buy a separate indemnity bond. The Treasury handles replacements through FS Form 1048, which has a built-in indemnity agreement in its certification section. Signing it assigns your rights in the original bond to the United States, commits you to surrender the original if it turns up, holds the government harmless against other claims, and obligates you to repay any sums the Treasury later pays out.5TreasuryDirect. Claim for Lost, Stolen, or Destroyed United States Savings Bonds Mail the completed form to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150. Series EE and I replacements are issued electronically through a TreasuryDirect account; paper replacements are no longer available.
Where to Get the Form
Start with the institution that needs the bond. Your bank, the corporation’s transfer agent, or the title company will tell you the required bond amount and whether they have a specific form. Some hand you a pre-printed document; others expect you to obtain the bond from a surety company and deliver the executed version to them.
Surety companies are the primary source for the bond itself. They are specialized insurance providers, and many operate online and are licensed nationwide. The surety will ask you to explain the loss, complete an application, and provide supporting documentation. Expect a soft credit check, because the surety is evaluating whether you could reimburse them if a claim were ever paid on the bond. If your credit is weak, look for surety programs aimed at that market, add a cosigner, or offer collateral. Underwriting standards vary, so a denial from one surety doesn’t mean the next one will turn you down.
Documentation to Gather Before Applying
Before you fill anything out, collect the paperwork that establishes what you lost and proves you owned it:
- An affidavit of loss: a sworn, notarized statement describing how the item was lost, stolen, or destroyed, and confirming you haven’t sold or transferred it.
- Proof of ownership: a receipt, account statement, copy of the original instrument, or correspondence from the issuer.
- Identifying details for the lost item: serial numbers, issuance dates, face amounts, and the names of all parties on the instrument. For a stock certificate, ask the transfer agent to place a stop transfer on the missing certificate while you arrange the bond.
- A police report if the item was stolen. Not always required for a simple loss, but it strengthens the claim.
Filling Out the Form
Every indemnity bond form names three parties. The principal is you, the person who lost the instrument. The obligee is the institution receiving the bond’s protection, usually the bank or corporation that issued the original. The surety is the company financially backing your obligation.
Enter the full legal name and address of each party exactly as they appear in the obligee’s records. A name mismatch is one of the most common reasons for delay. If you’re signing on behalf of a business, add your title so it’s clear you have authority to bind the entity.
Setting the Bond Amount
The bond amount, sometimes called the penalty, is the maximum the surety will pay on a valid claim. The obligee sets it, and it typically equals or exceeds the face value of the lost item. A fixed penalty bond covers instruments with a stable value, like a cashier’s check for a specific dollar amount. An open penalty bond covers instruments whose value fluctuates, like stock certificates, and the amount is usually pegged to current market value at the time of issuance.
Describing the Lost Item
The form calls for a precise description of the missing instrument: type of document, serial or certificate number, date of issuance, face amount, and names of every party listed on it. Errors here can invalidate the bond or bounce it back for correction, so verify each figure against your own records or the issuer’s before you sign.
Premiums and Other Costs
The premium is what you actually pay the surety. For lost instrument bonds it generally runs 1 to 3 percent of the bond amount. The SEC notes that an indemnity bond for a lost stock certificate typically costs about 2 to 3 percent of the certificate’s current market value,4Investor.gov. Updated Investor Bulletin: Lost and Stolen Securities so replacing a $10,000 certificate costs roughly $200 to $300 in premium. Strong credit tends to land you at the lower end. On top of the premium, budget for notarization if your state charges for it, and expect the obligee may add its own administrative fee.
Signing, Notarizing, and Delivering
Most indemnity bonds require the principal’s signature to be notarized. This verifies your identity and cuts down on fraudulent claims. Many banks offer notary services in-branch, which is convenient if the bank is the obligee. Independent notaries and online notarization services also work; confirm with the obligee that they accept remote notarization before you rely on it.
When you sign the bond you’ll also sign the surety’s general indemnity agreement. That’s the contract between you and the surety giving it the right to recover from you any money it pays out on a claim, plus legal fees and expenses. The obligation is personal, and business owners often sign as individual indemnitors in addition to the company signing. It survives the bond and creates real financial exposure, so read it before signing.
Delivery depends on the obligee. Certified mail with return receipt creates a paper trail. Some institutions accept submissions through secure online portals with digital signatures, though that’s more common for larger commercial bonds. If the obligee is your bank, hand-delivery to a branch works.
The 90-Day Waiting Period for Lost Checks
If you lost a cashier’s check, teller’s check, or certified check, expect a wait even after the bond is accepted. UCC Section 3-312 says your claim becomes enforceable on the later of the date you assert it or the 90th day after the check was issued, or for a certified check the 90th day after acceptance.6Legal Information Institute. Uniform Commercial Code 3-312 – Lost, Destroyed, or Stolen Cashier’s Check, Teller’s Check, or Certified Check Until that 90-day mark passes, the bank can still honor the original if someone presents it.
Section 3-312 also requires a declaration of loss: a written statement, under penalty of perjury, that you lost possession of the check, you’re the payee or remitter, the loss wasn’t the result of a voluntary transfer or lawful seizure, and you can’t reasonably obtain the check because it was destroyed, its whereabouts are unknown, or it’s in the hands of someone you can’t find or serve.7D.C. Law Library. DC Code 28:3-312 – Lost, Destroyed, or Stolen Cashier’s Check, Teller’s Check, or Certified Check That declaration is separate from the affidavit of loss the bond requires, though the two cover similar ground. No provision in the statute lets the bank shorten the 90-day period.
What Happens After the Bond Is Accepted
Once the obligee verifies the bond against its records and any waiting period expires, it processes your claim. For a lost cashier’s check the bank issues a replacement or refunds the amount. For a lost stock certificate the transfer agent issues a new certificate, increasingly in electronic book-entry form rather than on paper. If the bond is rejected for a clerical issue such as a name mismatch, wrong serial number, or insufficient amount, you correct it with the surety and resubmit, which can add time and cost.
Your Ongoing Liability
An indemnity bond doesn’t expire the way most people expect. It stays in force as long as the obligee faces potential exposure from the original instrument. If someone shows up two years later with your “lost” cashier’s check, the surety pays the bank and then comes to you for full reimbursement under the indemnity agreement, plus any legal fees it incurred.
The real-world risk depends on the instrument. A cashier’s check made payable to a specific person and never endorsed is unlikely to be cashed by a stranger. A bearer instrument or an endorsed check carries more exposure. UCC 3-309 acknowledges this range, noting that what counts as adequate protection depends on the degree of certainty about the facts in each case.1Legal Information Institute. Uniform Commercial Code 3-309 – Enforcement of Lost, Destroyed, or Stolen Instrument If the original later turns up, surrender it to the obligee right away. That’s what closes the loop the bond was written to cover.