Why a Notary Bond?
A notary is an official appointed position by the Secretary of State’s department in a given state. As with most public officials, the State specifies that the individual obtain a surety bond before receiving their appointment. This bond “makes sure” that when the official violates the public trust through negligence of their duties, finances are available to reimburse the State for its loss.
The main responsibility of notary publics is to ensure that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary public forgets to properly ensure the identity of the parties.
As a public official, the notary violates the public trust by failing in their responsibility to confirm identity. If a Texas 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 promise to pay to the obligee (the State) should losses occur for a penalty amount of the bond. Notary bonds are generally provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the period of a notary’s commission.
You’re probably familiar with a home insurance policy. When a person has a property insurance 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 home 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 surety is not simply written off. The surety will most likely seek reimbursement from the bonded party, 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 Errors and Omissions and may also be purchased for a nominal fee from insurance companies.
