Stuff Your Boss

A notary is an appointed position by the Secretary of State’s department in a given state. Like most public officials, the State specifies that the individual obtain a notary bond prior to getting their appointment. This bond “makes sure” that if the notary violates the public trust through negligence of their responsibilities, finances are available to indemnify the State for its loss.

The primary duty of a notary is to confirm that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary forgets to properly ensure the identity of the parties.

As a public official, the notary causes harm to the public trust by failing in their duty to confirm identity. If a California notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for its loss, because the State was negligent through its appointed representative.

A notary bond is a promise to pay to the obligee (the State) if losses occur for a penalty amount of the bond. Notary bonds are usually provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the period of a notary’s commission.

You may be familiar with a homeowners insurance policy. When you have a homeowners insurance in Indiana claim, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the carrier for the damages. Unlike a property insurance policy however, a notary bond is simply a guarantee that the finances will be available should losses occur. The surety (insurance company) makes a payment to the State up to the penalty amount of the bond. However, this claim paid by the carrier is not simply written off. The company will most likely seek reimbursement from the bonded party, the notary themself.

A notary bond protects the public. Who protects the notary? Insurance coverage is available to provide this protection – it’s called Notary Public Errors and Omissions and may also be purchased for a nominal fee from insurance carriers.