Why a Notary Bond?
A notary public is an appointed position by the Secretary of State’s office in a given state. As with many public officials, the State specifies that the person obtain a surety bond prior to getting their appointment. This bond “makes sure” that if the official violates the public trust through neglect of their duties, finances are set aside to indemnify the State for its loss.
The principal duty of notary publics is to ensure that the individual parties to a contract are who they claim to be. The State may suffer a loss if the notary forgets to properly ensure 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 Virginia notary 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) should losses occur for a penalty amount of the bond. Notary Public bonds are usually 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 home insurance policy. When you have a home insurance in Indiana loss, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the company for the claim. Unlike a property insurance policy however, a notary bond is simply a guarantee that the finances 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 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 E & O and may also be purchased for a nominal fee from insurance companies.
Tags: bond, Indiana, insurance, Loss, property insurance policy, public bonds, State, surety company, surety insurance, Virginia
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