What does a notary do?
A notary is an official appointed position by the Secretary of State’s department in a given state. Like many public officials, the State requires that the person get a surety bond before receiving their 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 ensure that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary neglects to properly ensure the identity of the parties.
As a public official, the notary harms the public trust by failing in their responsibility to confirm identity. If a New Hampshire 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 surety bond is a promise to pay to the obligee (the State) if losses occur for a penalty amount of the bond. Notary bonds are generally provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the term of the notary’s commission.
You may be familiar with a property insurance policy. When you have a homeowners insurance in Indiana loss, the insurance company pays the claim and writes off the loss. You aren’t required to reimburse the carrier for the damages. Unlike a property insurance policy however, a notary bond is simply a guarantee that the funds 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 E & O and may also be purchased for a nominal fee from insurance companies.