Surety Bond Notary
A written agreement to ensure compliance, payment, or execution of an act is one definition of a surety bond. This is the most straightforward use of the term. Due to the fact that it entails an agreement between three parties, surety is a distinctive kind of insurance. A surety arrangement involves the following three parties:
- Obligee – the one that requests a surety bond and, most of the time, is the one who benefits from having one. The obligee in the majority of surety bonds is a government agency on either the municipal, state, or federal level.
- Principal – the person who acquires the bond and assumes the duty to carry out the promise in accordance with the terms stipulated in the bond.
- Surety – the insurance company or surety firm that ensures that the obligation will be fulfilled. In the event that the principal is unable to carry out the act as agreed upon, the surety is legally responsible for any damages that would result.
Surety bonds, in fact, may have multiple different definitions, meanings, and purposes, depending on the individual bond need that is being met. This is because surety bonds are backed by an insurance company.
The United States of America is home to thousands upon thousands of distinct varieties of surety bonds. Some surety bonds either provide coverage for the costs of failing to comply with local, state, or federal license and permit requirements or guarantee that the applicant will do so. The payment of taxes or other financial obligations is guaranteed by different types of surety bonds.
Yet a notary bond is a kind of surety bond. The acquisition of a surety bond by a service provider is evidence of that business’ financial stability (the notary). In case of any ill faith on your part while performing your notarial duties, the state licensing body requires you to carry this insurance for the benefit of your clients.
Notary public bonds are contracts that are enforceable in the eyes of the law and promise that the notary will carry out their duties in a way that is both legal and ethical. The next step to take when a notary does not carry out their responsibilities as required is to submit a claim against the bond.
In most cases, the claim against the bond is submitted by either the state or by persons who have been adversely impacted by the activities of the notary. If a claim that has been made turns out to be legitimate, the value of the bond is expected to be used to reimburse those who have been harmed. Consumers and the state are shielded from any potential monetary damage as a result of this.
The Necessity for a Notary Bond
Notary public bonds are required of individuals because the law places a high level of respect on public notaries and notaries in general and because they serve as witnesses to confirm that signatures on legal documents are legitimate.
Before people may legally participate in any kind of commercial activity, residents of some states are required to first procure public bonds. It is necessary to check with the appropriate authorities in your state to see whether or not you are needed to hold a notary public bond in order to participate in a variety of activities.
Notary Errors and Omissions (E&O) Insurance
Errors and Omissions insurance, often known as Errors and Omissions insurance for notaries, falls under the category of Professional Liability insurance.
E&O insurance is required in a variety of professions since even the smallest mistake has the potential to result in significant financial repercussions for a client. As a result of this, the professional is in need of Professional Liability (E&O) Insurance in order to protect themselves.
Even if you are not guilty of the claims made against you, defending yourself against them will still require you to pay for legal representation and other associated expenditures.