A notary public is an official appointed position by the Secretary of State’s office in a given state. As with many public officials, the State requires that the person get a notary bond prior to receiving their commission. This bond “makes sure” that when the notary violates the public trust through neglect of their duties, funds are set aside to reimburse the State for its loss.
The primary responsibility of notaries public 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 fails to properly confirm the identity of the parties.
As a public official, the notary public violates the public trust by failing in their duty to confirm identity. If a Nebraska 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 surety bond is a guarantee of payment 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’re probably familiar with a home insurance policy. When you have a rental property in Indiana claim, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the company for the loss. Unlike a home insurance policy however, a notary bond is simply a guarantee that the funds will be available if losses occur. The surety (insurance company) makes a payment to the State up to the penalty amount of the bond. However, this claim paid by the carrier is not simply written off. The company 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 Errors and Omissions and may also be obtained for a nominal fee from insurance carriers.