A notary is an official appointed position by the Secretary of State’s office in a given state. Just like most public officials, the State specifies that the individual get a surety bond prior to receiving their commission. This bond “makes sure” that if the official violates the public trust through neglect of their duties, funds are set aside to indemnify the State for its loss.
The principal duty of notaries public is to validate 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 ensure 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 Wisconsin 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 generally provided by a surety company (typically an insurance carrier). The bond often runs concurrently with the period of a notary’s commission.
You’re probably familiar with a homeowners insurance policy. If you have an Indiana home insurance claim, the insurance carrier pays the loss and writes off the loss. You aren’t required to reimburse the company for the loss. Unlike a homeowners insurance policy however, a notary bond is simply a promise that the funds will be available should losses occur. The surety (insurance company) pays the State up to the penalty amount of the bond. However, this claim paid by the surety 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 Public Errors and Omissions and can also be obtained for a nominal fee from insurance companies.
