What does a notary do?
A notary is an appointed position by the Secretary of State’s office in a given state. Just like most public officials, the State requires that the individual get a surety or notary bond prior to receiving their appointment. This bond “makes sure” that when the notary violates the public trust through neglect of their responsibilities, funds are available to indemnify the State for its loss.
The primary responsibility of notaries is to ensure that the individual parties to an agreement are who they claim to be. The State may suffer a loss if the notary public fails 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 Missouri 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) 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 often runs concurrently with the term of the notary’s commission.
You’re probably familiar with a home insurance policy. When you have a rental property 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 when losses occur. The surety (insurance company) makes a payment to the State up to the penalty amount of the bond. However, this loss 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 obtained for a nominal fee from insurance carriers.