A notary is an appointed position by the Secretary of State’s office in a given state. Like many public officials, the State specifies that the individual obtain a surety bond prior to receiving their appointment. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, funds are available to indemnify the State for its loss.
The main duty of notaries public is to validate 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 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 Delaware 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 guarantee of payment to the obligee (the State) when 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 usually runs concurrently with the period of a notary’s commission.
You’re probably familiar with a home insurance policy. If you have a homeowners 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 loss. Unlike a property insurance policy however, a notary bond is simply a promise that the finances will be available should 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 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 can also be purchased for a nominal fee from insurance companies.