A notary public is an official appointed position by the Secretary of State’s office in a given state. Just like most public officials, the State requires that the person obtain a surety bond before getting the commission. This bond “makes sure” that when the official violates the public trust through negligence of their duties, funds are set aside to indemnify the State for its loss.
The main duty of notaries public is to ensure that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary public neglects to properly validate the identity of the parties.
As a public official, the notary causes harm to the public trust by failing in their duty to confirm identity. If a New Hampshire 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 guarantee of payment to the obligee (the State) should losses occur for a penalty amount of the bond. Surety bonds are often provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the period of the notary’s commission.
You may be familiar with a home insurance policy. When a person has a homeowners insurance in Indiana loss, the insurance carrier pays the loss 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 funds 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 loss paid by the surety 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 E & O and may also be obtained for a nominal fee from insurance companies.