A notary is an appointed position by the Secretary of State’s department in a given state. Just like many public officials, the State requires that the individual obtain a surety bond prior to getting their commission. This bond “makes sure” that if the official violates the public trust through negligence of their duties, funds are set aside to reimburse the State for its loss.

The principal duty of a notary is to validate that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary public fails to properly confirm the identity of the parties.

As a public official, the notary public causes harm to the public trust by failing in their duty to confirm identity. If an Idaho notary public 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) if losses occur for a penalty amount of the bond. Notary Public bonds are often 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 property insurance policy. If a person has a rental property in Indiana claim, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the carrier for the claim. Unlike a property 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 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 may also be obtained for a nominal fee from insurance companies.

This entry was posted on Saturday, November 28th, 2009 at 10:45 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.