What does a notary public do?
A notary is an appointed position by the Secretary of State’s office in a given state. Just like many public officials, the State specifies that the individual obtain a surety or notary bond prior to getting the appointment. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, finances are set aside to indemnify the State for its loss.
The main duty of a notary is to confirm that the individual parties to an agreement are who they claim to be. The State might suffer a loss if the notary fails to properly confirm the identity of each party.
As a public official, the notary causes harm to the public trust by failing in their responsibility to verify identity. If a New Jersey notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against the State for its loss, since the State was negligent through its appointed officer.
A surety bond is a promise to pay to the obligee (the State) should losses occur for a limit of the bond. Notary bonds are generally issued by a surety company (typically an insurance company). The bond generally runs concurrently with the period of the notary’s commission.
You’re probably familiar with an auto insurance policy. If a person has an auto insurance in Indiana loss, the insurance carrier pays the loss and writes off the loss. You aren’t required to pay back the company for the loss. Unlike an auto insurance policy however, a notary bond is simply a promise that the finances will be available should losses occur. The surety (insurance carrier) makes a payment to the State up to the limit 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 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 Errors and Omissions and may also be obtained for a nominal fee from insurance carriers.