Why bond a notary public?

A notary public is an official appointed position by the Secretary of State’s office in a given state. Just like most public officials, the State specifies that the individual get a surety or notary bond prior to receiving the commission. This bond “makes sure” that if the official violates the public trust through negligence of their responsibilities, finances are available to reimburse the State for its loss.

The main duty of notaries public is to ensure that the individual parties to an agreement are who they claim to be. The State may suffer a loss if the notary public neglects to properly confirm 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 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 guarantee of payment to the obligee (the State) should losses occur for a penalty amount of the bond. Surety bonds are often provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the term of the notary’s commission.

You may be familiar with a homeowners insurance policy. When a person has an Indiana home insurance claim, the insurance carrier pays the claim and writes off the loss. You aren’t required to reimburse the company for the claim. Unlike a home insurance policy however, a notary bond is simply a promise that the funds will be available when 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 surety will most likely seek reimbursement from the bonded person, 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 E & O and can also be obtained for a nominal fee from insurance companies.

Written by sillyfrank on July 9th, 2009 with comments disabled.
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