Notaries serve a valuable role
A notary public is an official appointed position by the Secretary of State’s department in a given state. 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 negligence of their responsibilities, finances are set aside to reimburse the State for its loss.
The principal responsibility of notary publics is to validate that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary public fails to properly validate the identity of the parties.
As a public official, the notary public causes harm to 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 promise to pay to the obligee (the State) if losses occur for a penalty amount of the bond. Surety bonds are often 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 property insurance policy. If a person has a homeowners insurance in Indiana claim, the insurance company pays the loss and writes off the loss. You aren’t required to reimburse the carrier for the damages. Unlike a homeowners insurance policy however, a notary bond is simply a promise that the funds will be available when losses occur. The surety (insurance company) pays 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 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 Errors and Omissions and can also be purchased for a nominal fee from insurance companies.