A notary public is an official appointed position by the Secretary of State’s office in a given state. Just like most public officials, the State requires that the person obtain a surety bond before receiving their commission. This bond “makes sure” that when the notary 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 ensure that the individual parties to a contract are who they claim to be. The State may experience a loss if the notary public neglects to properly validate 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 South Dakota notary public doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for the loss, because the State was negligent through its appointed representative.

A surety bond is a guarantee of payment to the obligee (the State) when losses occur for a penalty amount of the bond. Surety bonds are generally provided by a surety company (typically an insurance carrier). The bond usually runs concurrently with the term of the notary’s commission.

You’re probably familiar with a property insurance policy. If you have a home insurance in Indiana loss, the insurance carrier pays the loss 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 promise that the finances will be available should 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 carrier is not simply written off. The company 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 Errors and Omissions and may also be obtained for a nominal fee from insurance companies.

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