How a notary bond protects the public
A notary is an official appointed position by the Secretary of State’s office in a given state. Just like many public officials, the State requires that the person obtain a surety or notary bond prior to receiving the commission. This bond “makes sure” that when the notary violates the public trust through negligence of their duties, finances are available to indemnify the State for its loss.
The principal responsibility of notaries public is to validate that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary fails to properly validate the identity of the parties.
As a public official, the notary public causes harm to the public trust by failing in their responsibility to confirm identity. If an Arizona notary public 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 guarantee of payment to the obligee (the State) when losses occur for a penalty amount of the bond. Notary Public bonds are often provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the period of a notary’s commission.
You’re probably familiar with a property insurance policy. If you have an Indiana home insurance claim, the insurance carrier pays the claim and writes off the loss. You aren’t required to reimburse the company for the loss. Unlike a homeowners 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 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 can also be purchased for a nominal fee from insurance companies.
