What does a notary do?
A notary public is an official appointed position by the Secretary of State's office in a given state. As with many public officials, the State specifies that the individual get a surety or notary bond before receiving their appointment. This bond "makes sure" that if the notary violates the public trust through neglect of their duties, finances are available to indemnify the State for its loss.
The main responsibility of notaries public is to validate that the individual parties to an agreement are who they claim to be. The State may experience a loss if the notary forgets to properly validate the identity of the parties.
As a public official, the notary harms the public trust by failing in their duty to confirm identity. If an Idaho notary public doesn't confirm identity and a loss occurs, an injured party can file a claim against that State for the loss, because the State was negligent through its appointed representative.
A surety bond is a guarantee of payment to the obligee (the State) should losses occur for a penalty amount of the bond. Surety bonds are usually provided by a surety company (typically an insurance carrier). The bond generally runs concurrently with the period of the notary's commission.
You're probably familiar with a property insurance policy. If you have an Indiana home insurance loss, the insurance carrier pays the claim and writes off the loss. You aren't required to reimburse the carrier for the claim. Unlike a home insurance policy however, a notary bond is simply a guarantee that the funds will be available if losses occur. The surety (insurance company) pays the State up to the penalty amount of the bond.
However, this claim paid by the surety is not simply written off. The carrier 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 E & O and can also be obtained for a nominal fee from insurance companies.
