What is Notary E & O?
A notary is an official appointed position by the Secretary of State’s department in a given state. As with most public officials, the State requires that the individual obtain a notary bond prior to receiving their appointment. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, finances are set aside to indemnify the State for its loss.
The principal responsibility of notaries is to confirm that the individual parties to a contract are who they claim to be. The State may suffer a loss if the notary fails to properly ensure the identity of the parties.
As a public official, the notary public harms the public trust by failing in their responsibility to confirm identity. If a Washington notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for their 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. Surety bonds are often 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. If you have a home insurance in Indiana loss, the insurance company pays the claim 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 promise that the funds will be available if 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 surety 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 Sunday, November 29th, 2009 at 4:13 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.