A notary is an official appointed position by the Secretary of State’s office in a given state. As with many public officials, the State specifies that the individual obtain a notary bond before getting their commission. This bond “makes sure” that if the notary violates the public trust through negligence of their responsibilities, finances are available to reimburse the State for its loss.
The primary duty of notaries public 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 harms the public trust by failing in their duty to confirm identity. If an Arizona 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 promise to pay to the obligee (the State) when losses occur for a penalty amount of the bond. Surety bonds are generally provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the period of the notary’s commission.
You’re probably familiar with a property insurance policy. When a person has an Indiana home insurance 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 promise that the finances will be available should losses occur. The surety (insurance company) pays the State up to the penalty amount of the bond. However, this loss paid by the surety is not simply written off. The surety 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 E & O and may also be purchased for a nominal fee from insurance carriers.
