Why bond a notary public?

A notary public is an official appointed position by the Secretary of State’s department in a given state. Just like most public officials, the State requires that the individual get a notary bond prior to getting the appointment. This bond “makes sure” that when the notary violates the public trust through negligence of their responsibilities, finances are set aside to reimburse the State for its loss.

The main duty of notaries public is to validate that the individual parties to a contract are who they claim to be. The State may suffer a loss if the notary public forgets to properly validate 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 New York 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 surety bond is a promise to pay to the obligee (the State) if losses occur for a penalty amount of the bond. Surety bonds are generally provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the period of the notary’s commission.

You may be familiar with a property insurance policy. If you have a rental property in Indiana loss, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the carrier for the damages. 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 claim paid by the company is not simply written off. The carrier 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 carriers.