What is Notary E & O?
A notary public is an official appointed position by the Secretary of State’s department in a given state. Just like many public officials, the State requires that the individual get a notary bond before receiving their appointment. This bond “makes sure” that if the notary violates the public trust through negligence of their duties, finances are available to reimburse the State for its loss.
The primary duty of notaries is to validate that the individual parties to an agreement are who they claim to be. The State may suffer a loss if the notary fails to properly ensure the identity of the parties.
As a public official, the notary public violates the public trust by failing in their duty to confirm identity. If a Georgia notary 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 notary bond is a promise to pay to the obligee (the State) when losses occur for a penalty amount of the bond. Notary bonds are usually provided by a surety company (typically an insurance carrier). The bond often runs concurrently with the term of the notary’s commission.
You’re probably familiar with a truck insurance policy. When you have an auto insurance in Indiana claim, the insurance carrier pays the claim and writes off the loss. You aren’t required to reimburse the company for the damages. Unlike a vehicle insurance policy however, a notary bond is simply a promise that the finances will be available when 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 carrier 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 Public E & O and may also be obtained for a nominal fee from insurance carriers.
This entry was posted on Sunday, January 30th, 2011 at 4:56 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.