What is a Notary Public?
A notary is an official appointed position by the Secretary of State’s office in a given state. Just like many public officials, the State specifies that the individual obtain a surety or notary bond before getting the commission. This bond “makes sure” that when the official violates the public trust through neglect of their responsibilities, finances are set aside to indemnify the State for its loss.
The principal responsibility of notaries is to confirm that the individual parties to a contract are who they claim to be. The State may suffer a loss if the notary forgets to properly ensure the identity of the parties.
As a public official, the notary public violates the public trust by failing in their responsibility 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 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. Notary bonds are usually provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the term of the notary’s commission.
You’re probably familiar with a property insurance policy. If a person has a property insurance in Indiana loss, 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 if 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 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.