In short, because notaries have unlimited liability and the bond offers you no personal financial protection.
The purpose of the state required notary bond is to protect the public we serve. If a notary does something wrong either on purpose or accident the notary is sued as an individual.
The bonding company will pay out to the damaged party the first $10,000 of the judgement. You are responsible for paying them back the $10,000.00 plus anything above and beyond that as well as your legal defense cost. Notary Bonds are written in the name of the notary, never the employer, because you are responsible for your notarial acts. If you are in a state such as Oregon that doesn’t require a bond the notary pays the claim directly to the damaged party.
The notary E&O insurance is optional protection for you. It will pay out to the limit of the policy. The policy can be used to pay back the bonding company, the damaged party and half the policy limit can be used for your legal fees. Even notaries who are only using their commission for work purchase one of the lower limit policies just in case they need to hire an attorney.
Insurance can be purchased in either your name for the entire term of your commission or your company’s name one year at a time to cover your acts while you are employed.
For more information or to order insurance please call our office or follow the E&O link in the above Notary Tab.