How a notary bond protects the public
A notary public is an official appointed position by the Secretary of State’s department in a given state. As with most public officials, the State requires that the person obtain a surety bond before getting their appointment. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, funds are available to reimburse the State for its loss.
The primary duty of notaries is to confirm that the individual parties to an agreement are who they claim to be. The State may suffer a loss if the notary public neglects to properly validate the identity of the parties.
As a public official, the notary public harms the public trust by failing in their duty to confirm identity. If a notary public in Michigan 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. Surety bonds are usually provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the term of a notary’s commission.
You may be familiar with a property insurance policy. If a person has a property insurance in Indiana claim, the insurance company pays the claim and writes off the loss. You aren’t required to reimburse the carrier for the claim. Unlike a homeowners insurance policy however, a notary bond is simply a guarantee that the funds will be available when losses occur. The surety (insurance company) pays 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 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 Errors and Omissions and can also be obtained for a nominal fee from insurance companies.
This entry was posted on Sunday, September 27th, 2009 at 5:56 pm 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.