A notary public is an appointed position by the Secretary of State’s office in a given state. Like many public officials, the State requires that the person get a notary bond before getting their appointment. This bond “makes sure” that if the notary violates the public trust through negligence of their responsibilities, finances are available to indemnify the State for its loss.
The main responsibility of a notary public is to validate that the individual parties to a contract are who they claim to be. The State may experience a loss if the notary public forgets to properly ensure the identity of each party.
As a public official, the notary public violates the public good by failing in their duty to verify identity. If a New Jersey notary public doesn’t verify identity and a loss occurs, an injured party can file a claim against that State for its loss, because the State was negligent through its appointed notary.
A surety bond is a promise to pay to the obligee (the State) if losses occur for a penalty amount of the bond. Notary Public bonds are often issued by a surety company (typically an insurance company). The bond generally runs concurrently with the term of a notary’s commission.
You’re probably familiar with a car insurance policy. When a person has a auto insurance in Fort Wayne loss, the insurance carrier pays the loss and writes off the loss. You aren’t forced to pay back the carrier for the claim. Unlike an auto insurance policy however, a notary bond is simply a promise that the finances will be available when losses occur. The surety (insurance carrier) pays the State up to the limit of the bond. However, this claim paid by the carrier is not simply written off. The carrier 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 purchased for a nominal fee from insurance carriers.