Notary bonds are a prerequisite for practicing as a notary public in many states. The bond protects the public from financial harm from a notary’s negligence or misconduct.
Although many confuse it with insurance, the notary bond differs from an errors and omissions policy. Here’s why.
Protects the Public
Currently, 31 states require notaries to purchase a notary bond. These bonds serve as consumer protection against misconduct or fraud committed by the notary. In case of a notary’s misconduct, harmed parties can file a claim with the surety company that issues the bond. The bond will reimburse them for damages if a valid claim is proven.
The bond requirement is essential for protecting the public and upholding the integrity of the notary system. It also serves as a strong incentive for notaries to comply with laws and regulations.
Many notaries need clarification on the difference between a bond and Errors & Omissions insurance (E&O). While E&O protects notaries, bonds are meant to protect the public. Therefore, notaries must understand the importance of bond acquisition before performing notarial duties. If they don’t, they may face legal action and financial harm. Notaries need to purchase a notary bond and add errors and omissions coverage to their policy.
Protects the Notary Public
An Illinois notary bond is a surety bond that provides financial protection if a notary violates state regulations. It can also compensate parties who have incurred loss due to unethical practices, errors, omissions, or fraud committed by the notary in their capacity as a notary public. While some consider a notary bond similar to an insurance policy, they differ. Insurance policies protect individuals and businesses, while notary bonds protect the Obligee.
The fact that notaries must carry a bond helps keep them accountable for their actions and promotes professionalism in their work. It also helps ensure that notaries comply with state laws and industry regulations. For added protection, many notaries also get errors and omissions insurance. Insurance agents specializing in insurance for notaries can assist them with finding the proper coverage. Errors and omissions insurance can be included in a notary bond package or purchased separately.
Protects the Clients
Those who use notaries to authenticate their important documents rely on these professionals to perform their tasks legally and ethically. To help ensure that they do, most states require notaries to purchase and file a notary bond before they can lawfully perform notarial acts. The bond is a three-party agreement that guarantees that the notary will complete their duties by all applicable laws and regulations. If a notary fails to do so and causes a loss or damages to someone, that person can make a claim against the bond to get reimbursed for their losses.
The parties involved in a notary bond are the Obligee, the principal, and the surety company that underwrites the bond. If a claim is made against the bond, the Obligee can recover up to the bond amount from the surety company. To protect yourself against negligence claims, purchasing Errors & Omissions insurance as part of your notary package is a good idea.
Protects the Notaries
A notary bond is a type of surety bond that protects the public from financial loss resulting from a notary’s negligence or misconduct. Notaries are held to a higher level of professionalism and integrity than average, so states require them to take out special professional surety bonds like notary bonds.
A notary bond is legally binding between the Obligee and the Principal. If the obligor (the notary public) commits an act that negatively affects the Obligee (the party who requires the bond), they can file a claim against the bond to receive compensation. Many people mistakenly confuse notary bonds with notary errors and omissions insurance. However, the two are separate products that serve different purposes. A notary should always carry errors and omissions insurance in addition to their notary bond. An insurance agent specializing in notary insurance can help them select the right policies for their needs.
