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 individual obtain a surety bond prior to receiving the commission. This bond “makes sure” that when the official violates the public trust through negligence of their duties, funds are set aside to indemnify the State for its loss.
The principal responsibility of notaries is to ensure that the individual parties to a contract are who they claim to be. The State may experience a loss if the notary public neglects to properly validate the identity of the parties.
As a public official, the notary violates the public trust by failing in their duty to confirm identity. If a South Carolina 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) if 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 often runs concurrently with the period of the notary’s commission.
You may be familiar with a property insurance policy. If you have a homeowners 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 property insurance policy however, a notary bond is simply a guarantee that the funds will be available if losses occur. The surety (insurance company) pays the State up to the penalty amount of the bond. However, this loss paid by the company 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 Public Errors and Omissions and can also be obtained for a nominal fee from insurance companies.
