The Surety Bond
The notary is personally liable for notarial acts completed improperly, illegally or through gross negligence. This means that if you do something illegal or grossly neglect to fully carry out your required duties as a notary, you may be sued personally. This bond is a protection for the public against your actions (or inaction such as failing to administer an oath when required). This bond offers no protection for you as the notary. If you are held liable for damages because you did not exercise due care and diligence, you will be personally responsible to pay the damages and the bonding insurance company will aggressively seek the full return of the money spent on your behalf up to the $15,000 bond amount. Keep in mind that the $15,000 is not a limitation on the amount of damages for which you may be sued, it is the required amount you must have available through a licensed surety company and filed with the county clerk.
Errors and Omissions Insurance
As stated earlier, notaries are personally and financially liable for any improperly executed notary act. For this reason, notaries often choose to obtain errors and omissions insurance for financial protection. This is not a legal requirement, but it is a very good idea. Be sure to shop around for this and when comparing prices, find out whether the price quoted is for one year or for four years. Many companies quote a price for their E&O insurance but do not disclose that the renewal is yearly, thus quadrupling the price over the term of your commission. Currently, a four year $15,000 E&O policy should run around $45 for all four years. You can obtain higher amounts if you feel more comfortable such as $100,000 policies, but remember, while E&O insurance will protect you financially up to the amount of your policy, you will still be legally liable if you perform illegal or negligent notarial actions.
Note about Notary liablities
Most notaries never get sued and notaries who follow the guidelines proposed in this Notary course are even less likely to ever have to use errors and ommissions insurance as a result of a lawsuit. Even though this is the case, notaries should strongly consider carrying at least $15,000 of E&O insurance and those who are very active Mobile notaries or Loan Signers should carry $100,000 E&O policies.
You can review E&O prices at Notary Rotary or Valley Sierra Insurance once you obtain your commission.