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The duties of a notary public present inherent liability risks. Acting as an impartial witness who helps prevent legal document fraud means mistakes can create serious legal consequences. That’s why notary errors and omissions (E&O) insurance exists. This article explains E&O insurance, how it protects notaries, and where you can get it.
An E&O policy is a special kind of professional liability insurance. This insurance coverage is designed to protect notaries against claims of negligence. Because notaries are publicly commissioned, they are trusted to follow a state’s requirements while performing their duties. You can be found liable in court if a client suffers financial loss due to an alleged notarization error.
Unlike general liability insurance, errors and omissions insurance policies cover specific job-related mistakes. For notaries, it protects against the following claim scenarios:
Most notaries have a notary (or surety) bond during their active commission period. But many misunderstand who the bond protects.
Notary bonds do not protect the notary from civil judgment ; they protect the public from financial loss.
If a wronged party successfully files a claim against a notary’s bond, the insurance company that underwrote the notary bond will pay the party who filed the claim. After that, the bond provider has every right to demand repayment of the claim, including any legal fees, from the notary.
An E&O policy protects individuals and businesses. Since mistakes can result in lawsuits, notary E&O insurance generally covers judgments, attorney fees, court costs, and settlements – up to the limits of the policy.
Here’s an example:
A client sued a notary for negligence. The notary was found liable for $10,000 in financial loss. The notary’s bond provider paid the client $10,000 and then requested repayment from the notary. The notary owed $20,000 between the claim and legal fees.
With no E&O insurance, the notary paid the full amount out of pocket. Can you afford to pay for defense costs yourself?
This is where E&O insurance steps in. If the notary had $25,000 of E&O coverage, the policy would’ve protected the notary from financial loss by covering the surety bond payback plus the legal fees.
When considering a policy, there’s additional coverage information you need to know about before choosing. Generally, illegal acts, intentional deeds of wrongdoing, criminal activity, and bodily injury inflicted by your business are not covered.
Notary bonds are required in many states, but E&O insurance is not. Even if a state doesn’t require an errors and omissions insurance policy, we think you need one. The additional protection makes it a worthwhile investment for all notaries.
When selecting a policy, we recommend choosing an E&O policy that covers double or triple the amount of the state’s bond limit.
Notaries.com offers E&O insurance policies underwritten by the Travelers Indemnity Company. Most states have multiple coverage options to fit a wide range of budgets. Some policies start at less than $0.50 per month! For example, California policies start at $40 for $10,000 of coverage. Texas notaries can get $25,000 of coverage for only $70.
Policy terms last as long as a state’s notary commission term. There are no deductibles or required loss repayments.
Unfortunately, notary errors happen. While not all claims require legal defense, any claims made against a notary can become costly. Avoid massive bond repayments or out-of-pocket legal defense fees with an affordable E&O insurance policy!
Frankenfield, J. (2023, July 24). Errors and Omissions (E&O) Insurance: What It Covers. Retrieved from https://www.investopedia.com/terms/e/errors-omissions-insurance.asp
Nationwide. (n.d.). What is errors and omissions insurance? Retrieved from https://www.nationwide.com/lc/resources/small-business/articles/what-is-errors-and-omissions-insurance
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