Thank you for your question. I will do my best to assist you with your concerns. If you would like me to clarify my answer, I will be happy to do so.

To answer your questions directly:

1. There is nothing inherently illegal for a private company to request that you hand over your personal license as a means of obtaining a security badge. Many companies perform such a trade, but you can ask them if you can possibly consider providing them with a photo-copy instead.

2. As for losing your license, because they had personal control of the item, they are deemed to be in a 'bailment' relationship with you (similar to when you hand over your keys to a valet, or if you store your items off-site in a monthly rented space). Since they lost the item, they would be required to replace it at their own expense. If they lost your item, you could go to the DMV, obtain a new license, and force the company to pay for the replacement cost. Furthermore, if your license and personal information is used or stolen by someone else, you can hold the company directly liable for ALL direct and foreseeable expenses and damages to you, since you could show that they were the party who negligently lost your personal information in the first place.

Good luck.

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