What is Notary E & O?
A notary is an official appointed position by the Secretary of State’s office in a given state. Like many public officials, the State requires that the person obtain a surety bond before getting the commission. This bond “makes sure” that if the notary violates the public trust through neglect of their duties, finances are available to reimburse the State for its loss.
The principal duty of a notary is to confirm that the individual parties to a contract are who they claim to be. The State may experience a loss if the notary public forgets to properly ensure the identity of the parties.
As a public official, the notary harms the public trust by failing in their duty to confirm identity. If a notary public in Florida doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for the loss, because the State was negligent through its appointed representative.
A notary bond is a guarantee of payment to the obligee (the State) should losses occur for a penalty amount of the bond. Notary Public bonds are usually provided by a surety company (typically an insurance carrier). The bond often runs concurrently with the term of the notary’s commission.
You may be familiar with a property insurance policy. When a person has a property insurance in Indiana loss, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the company for the loss. Unlike a homeowners insurance policy however, a notary bond is simply a guarantee that the funds 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 loss paid by the carrier is not simply written off. The surety 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 E & O and may also be purchased for a nominal fee from insurance carriers.
This entry was posted on Tuesday, September 29th, 2009 at 4:49 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.