What is a notary bond?

A notary public bond is a surety bond that most states require a notary to file before the state will issue a commission. It guarantees, to the state and to anyone who relies on the notary's official acts, that the notary will faithfully perform the duties of the office. If the notary's error, negligence or misconduct causes a monetary loss, the injured party may recover from the bond up to its penalty, and the surety then recovers from the notary.

The three parties

Every surety bond has three parties, and understanding them explains everything else about the notary bond.

• The principal is the notary. The notary buys the bond and promises, in the bond, to discharge the office faithfully. The notary also agrees, by law and by the terms of the surety's application, to reimburse the surety for anything the surety pays.
• The obligee is the state (or county, or territory) that commissions the notary, and through the state, every member of the public who suffers a loss because of the notary's acts. The obligee is the party protected.
• The surety is the insurance company that issues the bond and stands behind the notary's promise. The surety pays valid claims up to the penalty and then looks to the notary for reimbursement.

What the bond guarantees

The condition of a notary bond is faithful performance: that the notary will perform every duty of the office honestly, competently and in conformity with the law. The bond does not guarantee the truth of the documents the notary acknowledges. It guarantees the notary's conduct in acknowledging them. The typical claim involves a notary who certified that a person appeared and was identified when that person did not appear or was not properly identified, and a forged deed, power of attorney or loan document was recorded or funded on the strength of the notary's certificate. The victim's loss is real and often large; the bond is the first source of recovery.

Bond amount, premium and term

The bond amount, or penalty, is set by statute and ranges from $500 in Wisconsin to $50,000 in Alabama and Louisiana. The premium is the price of the bond and is a small fraction of the penalty, because notary bonds are rated as a class with low claim frequency. The term matches the commission: four years in most states, five in D.C., six in Idaho and Michigan, eight in Indiana, ten in Arkansas. The premium is paid once for the whole term, and a new bond is required at each renewal. Our price for every jurisdiction is on the state schedule.

Why it is not insurance

Insurance transfers risk from the insured to the insurer. A surety bond does not transfer the notary's risk anywhere; it guarantees to a third party that the notary will bear it. When the surety pays a claim it does so as the notary's guarantor and is entitled to indemnity from the notary. The product that transfers the notary's risk is Notary Errors & Omissions insurance, which pays claims for honest errors with nothing to repay. The two products are complementary, and most bonded notaries carry both.

Who requires the bond

Twenty-eight states and the District of Columbia require a notary bond. The commissioning authority is usually the Secretary of State, but in several states the bond is filed at the county level (California, Kentucky, Michigan, Missouri, Nevada, Pennsylvania, Tennessee) or with the parish clerk of court (Louisiana), and in a few the commissioning authority is another office entirely (the Lieutenant Governor in Alaska and Utah, the Attorney General in Hawaii, the Department of Licensing in Washington, the Department of Financial Institutions in Wisconsin, the probate judge in Alabama). The state pages set out each procedure and the filing deadline.

What happens if a claim is made

A claimant notifies the surety, usually in writing, describing the notarial act and the loss. The surety investigates, and if the claim is valid pays it up to the penalty. The surety then demands reimbursement from the notary. Most state statutes also permit the commissioning authority to be notified of a paid claim, and a paid claim may lead to suspension or revocation of the commission. Our page on notary bond claims covers the process in detail.