What does a lost instruments bond cover?

A lost instruments bond serves as a form of protection against the financial loss incurred when an issued instrument, such as a money order, is lost and remains uncashed. The bond guarantees that the holder will be compensated in the event that the lost instrument is presented for payment, thus providing security and peace of mind for both the issuer and the holder.

By providing coverage specifically for uncashed money orders, the bond ensures that the financial obligation of the issuer is upheld, even if the original document cannot be located. This mechanism helps facilitate smooth transactions and prevents potential disputes over lost financial instruments.

The other options relate to different types of financial transactions or obligations not covered under a lost instruments bond. For instance, default on securities sales involves different legal and financial implications than those associated with lost instruments; delivery of contracted goods pertains to responsibilities in commercial transactions, and preservation of a minor's assets is a matter of trust and guardianship, each requiring distinct types of bonds or insurance.