We all make mistakes, due to fatigue, distraction and being over-worked. Unfortunately, when you make a mistake as a notary, you are dealing with important and sensitive documents. Even an unintentional error can cost you a lot of money. You don't want to put your personal or business assets at risk, which is why notary insurance may be a smart investment.
2 Coverages All Notaries Need
- Notary errors and omissions insurance: Protects you from unintentional and unknowing acts that can lead to lawsuits
- A notary public surety bond: Enables you to pay a judgment, settlement or claim against you if you do not have the financial ability to do so.
What Is Notary Insurance?
Notary insurance primarily consists of an errors and omissions policy that protects you if a client experiences a loss or injury due to your negligence, misinformation or other errors.
Additionally, there are other business coverage types you may want to include in your insurance portfolio. These include:
- General liability insurance: This is a basic liability policy that nearly every business should maintain to protect against a wide range of potential liability claims.
- Commercial vehicle insurance: If you travel by car to do your notary work, you may want to cover your vehicle, as it may not be covered by your personal auto policy when you use it for commercial purposes.
- Notary public surety bonds: In most states you will be required to hold a notary public surety bond in order to perform notary work. While these are not technically insurance policies, many insurance companies offer notary bonds you can purchase.
What Is Notary Error and Omissions Insurance?
The key component of your asset protection and risk management coverage is errors and omissions coverage, sometimes called an E&O policy. This protects you if you notarize a document improperly and unintentionally. This policy does not protect a notary who intentionally notarizes paperwork incorrectly, nor will it cover any liability issues outside of your notary practice.
The provides the following protection if a claim is filed against you:
- Provides for expert legal defense from insurance company attorneys
- Covers court costs and attorneys fees
- Pays claims if you are found at fault, up to the policy limit
- Deters people from filing false claims against you
There are three kinds of errors and omissions coverage that you want to be aware of:
- Regular notary E&O insurance: Covers up to $100,000
- High-limit notary E&O insurance: Covers up to $2 million
- Signing agent E&O insurance: Covers "gaps" in traditional notary E&O insurance
Keep in mind a notary errors and omissions insurance policy is a must-have coverage if you are a notary. According to state laws, the notary public has unlimited financial liability if he or she causes the public harm as a result of an error or omission.
What Gaps Does Signing Agent E&O Cover?
Many traditional notary only cover the actual notarizations in a loan package. Signing agent E&O policies would also cover additional mistakes, such as:
- Overlooked initials or unnotarized signatures
- Improperly dating the Right of Rescission
- Erroneous corrections made to documents
- Returning time-sensitive documents late
- Not completing the document signing on time
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What Is a Notary Public Surety Bond?
Most states require notaries to carry a notary bond while in office. A notary bond is a surety bond issued by a state licensed company that protects the public if the notary makes a mistake that causes financial damage to the public.
Unlike E&O insurance, this bond covers intentional acts by the notary, as well as unintentional acts. Normally the bond is between $500 and $15,000. This is not an insurance policy. If the notary has to pay a claim and the bond is used, the money will have to be reimbursed by the notary, as required by law.
Damages can exceed the amount of the bond. If this is the case, the damages may or may not be coved by errors and omissions insurance depending on the intent of the notary who committed the error.
Get Quotes on Notary Insurance
As a notary public you know the risks of notarizing important and sensitive documents, and most likely you take utmost care to make sure the paperwork is done correctly. And yet, sometimes mistakes can still happen.
Don't let one honest mistake damage your business and personal finances. The right insurance can put your mind at ease.
FAQs
Bonds and E&O insurance are both important for notaries. The main difference is that bonds help protect the public, while E&O insurance helps protect you. Bonds guarantee that your clients will get their money back if you make a mistake. On the other hand, E&O insurance helps cover you as a notary.
How much does a $7500 surety bond cost in Florida? ›
A $7,500, 4-year notary bond in the state of Florida costs $40 through Notary Public Underwriters.
How much E&O insurance do I need as a notary signing agent in Texas? ›
We recommend a minimum of $10,000 E&O coverage for those performing general notarial work, and $100,000 E&O coverage for notaries working as professional notary signing agents. Without E&O insurance, the notary public remains personally liable to the full extent of any damages sustained by the client.
Is E&O a bond? ›
Errors and omissions (E&O) insurance is a type of professional liability insurance designed to protect professionals, companies, and their workers against claims of negligent actions or inadequate work. In most cases, it covers claims settlements up to policy limits, in addition to court costs and legal fees.
What does Errors and omissions insurance not cover? ›
E&O insurance doesn't cover claims for property damage, bodily injury, workplace injuries, data breaches, intellectual property violations, or criminal acts such as fraud.
What is the most significant difference between a surety bond and an insurance policy? ›
Differences Between A Surety Bond And An Insurance Policy
The primary difference between a surety bond and insurance is that insurance will pay for losses in a claim, whereas a bonding company will guarantee your obligations are fulfilled.
How much does a notary surety bond cost in Florida? ›
The State of Florida requires all notary applicants to maintain a $7,500 notary bond for the duration of their notary term.
What is a surety bond Florida notary? ›
The Notary bond protects the public of Florida against any financial loss due to improper conduct by a Florida Notary. The bond is NOT insurance protection for Florida Notaries. We will file your bond with the state, speeding up your approval. (Notary stamp is required by law and is sold separately.)
How long does a surety bond last in Florida? ›
Some must be renewed annually, and some can't be renewed at all. In other words, a surety bond lasts as long as the party requiring the purchase of the bond (the “obligee”) says it must last—as long as the premiums are paid, of course.
How much should an E&O policy cost? ›
On average, errors and omissions insurance costs $61 per month, or about $735 annually. Most policyholders can expect to pay between $50 and $100 per month for their errors and omissions insurance coverage. Our figures are sourced from the median cost of policies purchased by TechInsurance customers.
How much is errors and omissions (E&O) insurance? Average costs for E&O coverage for small business owners ranges from $500 to $1,000 per employee, per year. So, if your business has 50 employees, you can estimate your errors and omissions premium to be between $25,000 and $50,000 annually.
How much does a 10 000 surety bond cost in Texas? ›
How much does a $10,000 Texas notary public bond cost? A $10,000 Texas notary public bond costs $50 and can be issued instantly 24/7. Errors and omissions coverage is also available in various amounts depending on the amount of coverage the notary feels is necessary.
Is E&O insurance tax deductible? ›
Errors and Omissions (E&O) insurance and general business insurance are also deductible, as are any real estate taxes necessary for your business.
Do banks carry E&O insurance? ›
Bankers professional liability (BPL) Insurance (BPLI) is a type of errors and omissions (E&O) coverage written for banks and financial institutions.
Are surety bonds a liability? ›
A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).
What is errors and omissions insurance also called? ›
If your business provides professional advice of any sort you will need errors and omissions insurance, also known as professional indemnity insurance.
Which type of insurance is also known as errors and omissions insurance? ›
Errors and omissions insurance, also known as E&O insurance and professional liability insurance, helps protect your business from lawsuits that claim you made a mistake in your professional services. This insurance can help cover your court costs or settlements, which can be very expensive for your business to pay.
What type of insurance is errors and omissions? ›
E&O insurance is a kind of specialized liability protection against losses not covered by traditional liability insurance. It protects you and your business from claims if a client sues for negligent acts, errors or omissions committed during business activities that result in a financial loss.
What is surety bond in insurance terms? ›
A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).
