Securing Your Transactions With Notary Bonds

Securing Your Transactions With Notary Bonds

Notaries play a crucial role in legal transactions by verifying signatures and administering oaths. Yet, even the most scrupulous notaries can make mistakes.

A notary bond protects the public from financial loss caused by a notary’s misconduct or errors. It’s separate from errors and omissions insurance, which protects the notary.

They Protect You From Identity Theft

Like any business, notaries need general liability insurance to protect themselves from lawsuits related to incidents outside of their control, such as a customer who slips and falls in your office. It is also common to purchase errors and omissions (E&O) insurance, which covers any missteps that result in financial loss for clients.

As public officials, notaries are required to keep their journals secure. This is important because criminals can use the information you write down, including the signer’s social security number, ID, DOB, and thumbprint, to commit identity theft or fraud. If you don’t properly store your journal, a criminal can forge your seal and fraudulently notarize documents.

Florida notary bond guarantees that you will perform your duties as state law prescribes. If you are found guilty of misconduct, and a claim is made against your bond, the surety company will pay the damages up to your bond’s limit.

They Protect You From Fraud

A notary bond is a type of surety bond that protects the public from financial loss resulting from a notary’s dishonest or fraudulent actions. Most states require notaries to purchase a bond before being licensed to practice their profession.

Criminals can also steal notary seal impression images and create counterfeit documents. This is why keeping detailed journal records of your notarization is essential. If you’re sued by someone who believes they were scammed because of a forged seal, your detailed journal could help dismiss the lawsuit.

Regardless of your best efforts to avoid fraud, mistakes can still happen. Errors and omissions (E&O) insurance is another way to financially protect yourself from being sued over your work. This policy differs from a notary bond as it covers your legal expenses and compensation for any judgments or settlements awarded against you.

They Protect You From Identity Theft

Identity theft is one of the most dreaded forms of crime, and notaries are often caught in the crosshairs. Criminals can use a notary’s seal stamp and signature, copied from public records like deeds, to transfer property or execute other fraudulent documents.

Thankfully, Notaries can help prevent this type of crime by keeping their journals secure when not in use and reporting any instances of fraud to authorities. Also, notaries should not enter signers’ social security numbers, identification numbers, DOBs, or thumbprints in their journals unless they are required by state law.

Another way to protect yourself from identity fraud is to have errors and omissions insurance, which covers legal defense costs if you are sued for not performing your duties properly. Errors and omissions insurance policies are inexpensive and can be purchased for the length of your notary commission. Many notaries also purchase a general liability insurance policy that covers business-related injuries and damages, such as if a customer trips on loose flooring in your office and sues you.

They Protect You From Fraudulent Documents

Most states that require notaries to be bonded also require them to carry errors and omissions insurance. This policy protects notaries in case a client seeks financial compensation for negligence or mistakes on the notary’s part.

Errors and omissions insurance differs from a notary bond because it protects the notary rather than the public in case of a claim. Many notaries purchase E&O insurance to add an extra layer of protection to their notary bonds.

For example, let’s say a notary witnesses a signature on a legal document that isn’t genuine. This could lead to serious consequences for the two parties involved in the transaction, and they might file a claim against the notary’s bond for damages. If the claim is valid, the surety company will reimburse the harmed party up to the bond amount.

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