After the effective date of this part, any bond filed pursuant to Acts 1993, No. 1308, Arkansas Code § 27-20-202, must guarantee payment for a period of three (3) years from its effective date, to any prior owner or lienholder and any subsequent purchaser of an all-terrain vehicle, or person acquiring any security interest in it, and their respective successors in interest, heirs, or assigns, against any expense, loss, or damage, including reasonable attorney’s fees, by reason of:

1. (1) The issuance of the certificate of title to the all-terrain vehicle; or
2. (2) On account of any defect in or undisclosed security interest upon the right, title, and interest of the applicant in and to the all-terrain vehicle.