What does a notary do?
A notary public is an official appointed position by the Secretary of State’s office in a given state. Like many public officials, the State requires that the individual obtain a surety or notary bond before getting their commission. This bond “makes sure” that if the notary violates the public trust through neglect of their responsibilities, funds 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 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 Texas notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for the 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 often provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the period of a notary’s commission.
You may be familiar with a property insurance policy. When you have a property insurance in Indiana claim, the insurance company pays the claim and writes off the loss. You aren’t required to reimburse the company for the claim. Unlike a property insurance policy however, a notary bond is simply a guarantee that the funds 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 carrier 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 can also be purchased for a nominal fee from insurance companies.