What is a Notary Public?
A notary is an official appointed position by the Secretary of State’s department in a given state. Like many public officials, the State requires that the individual get a surety or notary bond before receiving the commission. This bond “makes sure” that if the official violates the public trust through neglect of their duties, finances are set aside to indemnify the State for its loss.
The principal duty of notaries public is to validate that the individual parties to an agreement are who they claim to be. The State may suffer a loss if the notary public forgets to properly ensure the identity of the parties.
As a public official, the notary violates the public trust by failing in their responsibility to confirm identity. If a Wisconsin 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 notary bond is a guarantee of payment to the obligee (the State) if losses occur for a penalty amount of the bond. Surety bonds are usually provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the period of the notary’s commission.
You may be familiar with a homeowners insurance policy. When a person has an Indiana home insurance claim, the insurance carrier pays the claim and writes off the loss. You aren’t required to reimburse the carrier for the claim. Unlike a home insurance policy however, a notary bond is simply a guarantee that the funds will be available if 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 surety 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 can also be purchased for a nominal fee from insurance carriers.