What is Notary E & O?
General September 28th, 2009
A notary is an official appointed position by the Secretary of State’s office in a given state. Like many public officials, the State specifies that the person obtain a surety or notary bond prior to receiving the appointment. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, finances are set aside to indemnify the State for its loss.
The primary duty of a notary is to confirm that the individual parties to a contract are who they claim to be. The State may experience a loss if the notary fails to properly ensure the identity of the parties.
As a public official, the notary public causes harm to the public trust by failing in their duty to confirm identity. If a Mississippi notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for its 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 Public bonds are generally provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the term of the notary’s commission.
You may be familiar with a property insurance policy. When a person has a homeowners insurance in Indiana loss, the insurance company pays the claim and writes off the loss. You aren’t required to reimburse the company for the damages. Unlike a home insurance policy however, a notary bond is simply a promise that the finances will be available should losses occur. The surety (insurance company) pays the State up to the penalty amount of the bond. However, this claim paid by the surety 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 Public Errors and Omissions and may also be obtained for a nominal fee from insurance carriers.
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