Why bond a notary public?

A notary is an appointed position by the Secretary of State’s office in a given state. Like many public officials, the State requires that the person obtain a surety bond before getting the appointment. This bond “makes sure” that when the official violates the public trust through negligence of their responsibilities, funds are available to reimburse the State for its loss.

The principal duty of a notary is to ensure that the individual parties to a contract 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 violates the public trust by failing in their duty to confirm identity. If a South Dakota 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 notary bond is a promise to pay to the obligee (the State) if 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 term of a notary’s commission.

You’re probably familiar with a homeowners insurance policy. If you have a rental property in Indiana loss, the insurance company pays the claim and writes off the loss. You aren’t required to reimburse the carrier for the claim. Unlike a homeowners insurance policy however, a notary bond is simply a guarantee that the finances will be available when 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 company 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 Errors and Omissions and can also be obtained for a nominal fee from insurance companies.

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