Mar
9
How to become a notary public
Filed Under Investing
A notary public is an official appointed position by the Secretary of State’s department in any state. Just like many public officials, the State requires that the person get a notary bond prior to getting the appointment. This bond “makes sure” that when the official violates the public good through negligence of their duties, finances are available to indemnify the State for its loss.
The main responsibility of notaries is to confirm that the individual parties to an agreement are who they say they are. The State might experience a loss if the notary fails to properly validate the identity of both parties.
As a public official, the notary public harms the public good by failing in their responsibility to confirm identity. If a notary public in Michigan doesn’t confirm identity and a loss occurs, an injured party can file a claim against that State for their loss, since the State was negligent through its appointed notary.
A notary bond is a guarantee of payment to the obligee (the State) when losses occur for a limit of the bond. Notary Public bonds are often provided by a surety company (typically an insurance company). The bond usually runs concurrently with the period of the notary’s commission.
You’re probably familiar with a vehicle insurance policy. When you have an Indiana auto insurance loss, the insurance company pays the loss and writes off the loss. You aren’t asked to pay back the company for the loss. Unlike a vehicle insurance policy however, a notary bond is simply a guarantee that the funds will be available should a loss occur. The surety (insurance carrier) pays the State up to the limit of the bond. However, this loss paid by the company is not simply written off. The surety 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 E & O and may also be obtained for a nominal fee from insurance carriers.
