A notary public is an official appointed position by the Secretary of State in each given state. As with most public officials, the State requires that the individual obtain a surety or notary bond prior to receiving their appointment. This bond “makes sure” that if the official violates the public trust through negligence of their duties, funds are available to reimburse the State for its loss.
The primary responsibility of a notary public is to validate that the individual parties to every notary signing are in fact who they claim to be. If the notary fails to properly confirm the identity of the parties, the State may suffer a loss. Here’s an example …
Let’s say Susie wants to buy a car currently titled to Lisa. Susie and Lisa bring the title to their local notary public to notarize their signatures on the transfer of title. To confirm their respective identities, the notary asks both Susie and Lisa for their drivers license. Susie promptly presents her drivers license, but Lisa claims to have left her ID at home. Susie is in a big hurry to get the deal done, so the notary public simply instructs both Lisa and Susie to sign the title, after which the notary signs, or notarizes, their signatures.
Unfortunately, truth be told, the chic claiming to be “Susie” actually is Susie’s roommate Lolita. The real Susie is away on a badly needed vacay in the Bermudas and truly had no intention of selling her beloved car. Do you think Susie is a happy camper? Had the notary refused to witness the transaction because Lolita did not present valid and proper identification, Susie would still have the title to her car.
As a public official, the notary public in this example violated the public trust by failing their duty to properly confirm the identity of a signer. Susie has recourse to file a claim against the State in which the transaction occurred for her loss, because the State was negligent through its appointed representative.
Welcome the hero — A notary bond. Simply put, a notary bond is a guarantee of payment to the obligee, or the State, should a loss occur for a penalty amount of the bond. Notary bonds are typically provided an insurance carrier, often called a surety company. The bond generally runs concurrently with the term of the notary public’s commission.
We are all probably familiar with an auto insurance policy. If you have an auto accident, the insurance company pays the claim and writes off the loss. You are not required to reimburse the company for the damages. However, unlike an auto insurance policy, a notary bond is simply a guarantee that the funds will be available should a loss occur. The insurance or surety 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 insurance or surety company will most likely seek reimbursement from the bonded party – the NOTARY!
A notary bond protects the public. Who protects the notary? Insurance coverage is available to provide the notary protection. It is called Notary Public Errors and Omissions Insurance.
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To sum it up, purchasing a notary bond is a state requirement to become a notary public. I hope this overview has shed some light on why this is needed to protect the public trust!