Anything associated with the Iqama is itself a painful process for expatriates working in Saudi Arabia. The woes are compounded when someone has the misfortune of losing the Iqama. Without an Iqama, you are a non-entity in the Kingdom. What exactly do you do, if you lose your Iqama?
I want to mention the official and unofficial routes here. First, the official one.
First and foremost, you must immediately inform your sponsor of the loss of your iqama. Also, immediately give a written complaint in Arabic to the Police. Do take your company's PRO along with you while you do this. The Police would not entertain if you do it yourself. This is extremely important and is the starting point of the rather long process in getting back your iqama. Next, an advertisement has to be placed in Arabic in a local newspaper. You will have to wait for a month from the date of this advertisement.
Your sponsor will have to write a letter in Arabic to the Passport Department. The letter must explain in detail where you lost the Iqama and the reason for the loss. Seems rather strange why they want to know the reason for the loss - how does it matter, anyway the Iqama is lost - but this is how the system works, so make sure that the letter has these two things. Along with this letter, you must also submit photocopies of your passport and the lost Iqama. Also, you must attach two passport size photographs (4cm x 6 cm).
You must attach all of the above with a specific form available in the Passport Department for this purpose. This form must be signed by you and must have the signature and official stamp of your sponsor.
There is a fine for loss of Iqama. Along with this fine, you must also pay the fees for the Iqama. The entire money has to be paid in an authorized bank. To my knowledge, only Riyad Bank accepts this. Collect the receipt for this money and attach it along with the rest of the documents mentioned above.
Now you have done your part, but it is purely a matter of luck how soon you will receive your new Iqama. This is probably the most painful part of the whole process.
There is another route which expatriates normally adopt. Please note that I am not recommending this, but am just mentioning it here as a matter of information.
There is a place in Jeddah called Souk-Al-Somali (in other words, Somali souk) in Bab Makkah district. This is a rather notorious place. If your Iqama or any important document is stolen, there is a very high probability that it will end up in this area. All you have to do is walk around aimlessly in this place. You need not approach anyone. There are eyes watching you, and sooner or later, someone will approach you, asking whether you have lost something. The guy will verify details from you such as your sponsor's name and the expiry date of the Iqama. You will have to strike a deal with him. Do make a good bargain. Do not pay any money until you have actually physically seen your Iqama. In case your Iqama is with your family, the rate proportionately increases, so it all depends. Once the deal is settled, you have to give your mobile number to the guy. He will call you in a day or two and will ask you to come to a particular location. The most 'popular' one is the parking area in Al-Mahmal Center.
Once again, let me reiterate that I am not asking you to adopt the unofficial route. But when expatriates are in trouble and you have no one else to help, your troubles added by your lack of knowledge of Arabic, this information might probably help you. I wish you never land into this kind of trouble and it always better to be careful and take care of all of your important documents.