A notary is an official appointed position by the Secretary of State’s department in a given state. Like most public officials, the State requires that the person get a surety or notary bond prior to receiving their commission. This bond “makes sure” that when the official violates the public good through negligence of their duties, funds are available to reimburse the State for its loss.
The main responsibility of a notary public is to ensure that the individual parties to an agreement are who they say they are. The State can suffer a loss if the notary neglects to correctly confirm the identity of each party.
As a public official, the notary public causes harm to the public good by failing in their duty to confirm identity. If a Delaware notary public doesn’t verify identity and a loss occurs, an injured party may file a claim with that State for their loss, because the State was negligent through its appointed officer.
A notary bond is a guarantee of payment to the obligee (the State) when losses occur for the penalty amount of the bond. Surety bonds are generally issued by a surety company (typically an insurance carrier). The bond generally runs concurrently with the term of a notary’s commission.
You may be familiar with an auto insurance policy. If a person has an Indiana truck insurance claim, the insurance company pays the claim and writes off the loss. You aren’t asked to reimburse the company for the claim. Unlike a car 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 loss paid by the surety 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 Public Errors and Omissions and can also be obtained for a nominal fee from insurance carriers.