We all make mistakes, due to fatigue, distraction and being over-worked. Unfortunately, when you make a mistake as a notary, you are dealing with important and sensitive documents. Even an unintentional error can cost you a lot of money. You don't want to put your personal or business assets at risk, which is why notary insurance may be a smart investment.
2 Coverages All Notaries Need
- Notary errors and omissions insurance: Protects you from unintentional and unknowing acts that can lead to lawsuits
- A notary public surety bond: Enables you to pay a judgment, settlement or claim against you if you do not have the financial ability to do so.
What Is Notary Insurance?
Notary insurance primarily consists of an errors and omissions policy that protects you if a client experiences a loss or injury due to your negligence, misinformation or other errors.
Additionally, there are other business coverage types you may want to include in your insurance portfolio. These include:
- General liability insurance: This is a basic liability policy that nearly every business should maintain to protect against a wide range of potential liability claims.
- Commercial vehicle insurance: If you travel by car to do your notary work, you may want to cover your vehicle, as it may not be covered by your personal auto policy when you use it for commercial purposes.
- Notary public surety bonds: In most states you will be required to hold a notary public surety bond in order to perform notary work. While these are not technically insurance policies, many insurance companies offer notary bonds you can purchase.
What Is Notary Error and Omissions Insurance?
The key component of your asset protection and risk management coverage is errors and omissions coverage, sometimes called an E & O policy. This protects you if you notarize a document improperly and unintentionally. This policy does not protect a notary who intentionally notarizes paperwork incorrectly, nor will it cover any liability issues outside of your notary practice.
The E & O policy provides the following protection if a claim is filed against you:
- Provides for expert legal defense from insurance company attorneys
- Covers court costs and attorneys fees
- Pays claims if you are found at fault, up to the policy limit
- Deters people from filing false claims against you
There are three kinds of errors and omissions coverage that you want to be aware of:
- Regular notary E & O insurance: Covers up to $100,000
- High-limit notary E & O insurance: Covers up to $2 million
- Signing agent E&O insurance: Covers "gaps" in traditional notary E & O insurance
Keep in mind a notary errors and omissions insurance policy is a must-have coverage if you are a notary. According to state laws, the notary public has unlimited financial liability if he or she causes the public harm as a result of an error or omission.
What Gaps Does Signing Agent E&O Cover?
Many traditional notary E & O policies only cover the actual notarizations in a loan package. Signing agent E & O policies would also cover additional mistakes, such as:
- Overlooked initials or unnotarized signatures
- Improperly dating the Right of Rescission
- Erroneous corrections made to documents
- Returning time-sensitive documents late
- Not completing the document signing on time
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What Is a Notary Public Surety Bond?
Most states require notaries to carry a notary bond while in office. A notary bond is a surety bond issued by a state licensed company that protects the public if the notary makes a mistake that causes financial damage to the public.
Unlike E & O insurance, this bond covers intentional acts by the notary, as well as unintentional acts. Normally the bond is between $500 and $15,000. This is not an insurance policy. If the notary has to pay a claim and the bond is used, the money will have to be reimbursed by the notary, as required by law.
Damages can exceed the amount of the bond. If this is the case, the damages may or may not be coved by errors and omissions insurance depending on the intent of the notary who committed the error.
Get Quotes on Notary Insurance
As a notary public you know the risks of notarizing important and sensitive documents, and most likely you take utmost care to make sure the paperwork is done correctly. And yet, sometimes mistakes can still happen.
Don't let one honest mistake damage your business and personal finances. The right insurance can put your mind at ease.