What is a notary bond?

To delve into what a notary bond is, we first need to define what a notary public is.

The Secretary of State’s office in a given state appoints an official to the position of notary public. Just like many public officials, the State requires the person to acquire a notary bond or surety bond prior to receiving their appointment. This bond ensures that in case the official violates the public trust by neglecting his or her duties, there are funds available to reimburse the state for its loss.

A notary public’s primary responsibility is to authenticate that the individual parties in a contract are who they claim to be. If the notary fails to properly confirm the identity of the parties, the state can possibly suffer a loss.

Here is one example:

Nate wants to purchase a car that is currently titled to a guy named Simon. Nate and Simon take the title to their local notary public to have their signatures notarized on the transfer of title. The notary asks both men for their driver’s licenses to confirm their identities. Nate shows his driver’s license, but Simon states that he left his ID at home.

Simon wants to get the deal done as soon as possible, to the notary public asks both Simon and Nate to sign the title. The notary then signs or notarizes both men’s signatures. Unfortunately, the person who claimed his name was Simon is actually Simon’s roommate named Tyler.

The real Simon had no intention of selling the car and is, in reality, away on vacation. Simon would also still have the title to his car had the notary refused to witness the transaction because Tyler never had any identification to show in the first place.

In this example, the public official violated the public trust by failing in their duty confirm the person’s true identity. Simon will need to file a claim against the State where the transaction occurred for the loss of his car since the State was negligent through its appointed representative.

Going back to the question on what is a notary bond, it is a guarantee of payment to the State for a penalty amount in case a loss happens. Surety companies or insurance carriers are usually the ones who provide notary bonds. The bond generally runs simultaneously with the term of the notary public’s commission.

If you are familiar with an auto insurance policy and you have an auto accident, the insurance company pays the claim and writes off your loss. You won’t need to reimburse the company for the damages. However, unlike an auto insurance policy, a notary bond is just a guarantee that the funds will be available in case a loss occurs. When the surety or insurance company pays the State up to the penalty amount of the bond, the loss paid is not simply written off. They will seek reimbursement from the bonded party, the notary.

If a notary bond protects the public, who protects the notary? To provide this protection, insurance coverage is available. It is called Notary Public Errors and Omissions. This may be purchased from insurance companies for a nominal fee.

To sum up everything on what is a notary bond, it is a document that is needed by notary applicants before they are commissioned. It is required by many states to protect the public trust.