A notary is an official appointed position by the Secretary of State’s office in a given state. Just like many public officials, the State specifies that the individual get a surety bond prior to receiving their appointment. This bond « makes sure » that if the notary violates the public good through neglect of their duties, funds are set aside to reimburse the State for its loss.
The primary duty of notaries public is to ensure that the individual parties to an agreement are who they say they are. The State may suffer a loss if the notary public fails to correctly ensure the identity of the parties.
As a public official, the notary causes harm to the public trust by failing in their duty to validate identity. If a Minnesota notary public doesn’t verify identity and a loss occurs, an injured party can file a claim with 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) should losses occur for the limit of the bond. Notary bonds are often provided by a surety company (typically an insurance company). The bond often runs concurrently with the term of the notary’s commission.
You may be familiar with an auto insurance policy. If a person has an Indiana truck insurance claim, the insurance carrier pays the loss and writes off the loss. You aren’t asked to reimburse the company for the damages. Unlike a truck insurance policy however, a notary bond is simply a promise that the finances will be available if losses occur. The surety (insurance company) makes a payment to the State up to the limit of the bond. However, this claim paid by the company 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 E & O and may also be purchased for a nominal fee from insurance companies.
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