Notary Bonds and Insurance

by Daniel C. Lewis

Everyday someone is jumping in, feet first, starting a new notary business.  They have checked out some websites, joined a couple of local and national organizations and took the time to write out a business plan for their notary business.  One question that should come up at the very beginning of this new venture is....

What type of insurance do I need to properly protect my business as well as my personal assets?

Most online website will give some basic information about Bonds and E&O  Insurance.  If this was the year 2001 that would be great protection but since we are in 2018 this definitely won't be sufficient coverage for the professional notary entrepreneur.  Let's take a look at some of the different protection available for the notary entrepreneur.

Bonds

What is a Notary Bond?  A notary bond is a legally binding contract guaranteeing the notary will complete tasks ethically and in adherence with the local laws.  Notary bonds are required because notaries and notaries public are entrusted with a great deal of legal authority and are appointed as witnesses who ensure signatures on important legal documents are valid.  Bonds are usually required in each jurisdiction (check your local requirements).

Please keep in mind, however, bonds actually protect the public and not the notary.  The reason why that's important is that if there is ever an issue and your notary bond is called to pay damages, the notary would need to repay the bond back to the bonding company.  Click here to get a quote on a Notary Bond     

Errors & Omission Insurance

E&O Insurance is a type of professional liability insurance that protects the notary entrepreneur from mistakes resulting in financial loss by the customer.  If a customer makes a claim for damages against a Notary Bond, E&O Insurance will protect the notary's assets up to the chosen coverage amount.  Without E&O Insurance notaries are personally liable for damages caused by a mistake made while acting as a notary, which is why this coverage is so important.  It is important to remember that E&O Insurance does not cover mistakes deemed to be intentional in nature.  E&O Insurance is highly recommended.  Click here to get a quote on Errors and Omission Insurance

Signing Agent E&O Insurance

Signing Agent E&O Insurance (also called Signing Agent Liability Insurance) is designed to fill the gaps not covered by traditional Notary E&O Insurance.  Signing Agent Liability Insurance is specifically designed for notaries who assist with loan signings.  The policy fills the gaps left with traditional Notary E&O Insurance, which only provides coverage for the actual notarization in loan packages.  Signing Agent E&O Insurance covers unintentional errors or omissions while the notary is acting as a "signing agent".  In addition to the notarizations, this insurance covers such things as getting all other signatures and initials, correctly dating the documents, completing the signing in the time period specified, and promptly returning the signed documents.  Defense costs are also covered within the coverage amount.  Click here for quote on Signing Agent Errors & Omission Insurance

Identity Theft Protection

I was recently in a room full of seasons professional notary entrepreneurs and asked two questions.  The first question was how many of you ever had to use your Errors & Omissions Insurance because of a claim for damages?  Keeping in mind the average years experience was about 7 years, not one hand went up.  Then I asked how many of you ever been a victim or knows a victim of identity theft?  All the hands in the room went up.  Having identity theft protection is one of the most under rated forms of insurance that the notary entrepreneur can have.  I am not referring to some watered down version of identity theft protection from a bank or as an add on to an insurance policy that will not properly protect the notary or his/her business.  I am referring to a comprehensive plan that not only protects against the notary from credit card scams, drivers license identity theft, passport scams, and medical fraud but even protect the notary's social media post from being hijacked.

Since some notary entrepreneur assignments deal primarily with real estate transactions and require the notary to submit to annual background screens, having comprehensive identity theft protection is critical to operating a efficient effective notary business.  Click here for identity theft protection

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Daniel C. Lewis resides in Carmel, IN.  He was named in 2010 Notary of the Year by the National Notary Association.  He was also named in the same year an Honorary Secretary of State by the Indiana Secretary of State.  Daniel is currently serving as the President of the Indiana Notary Association.  Daniel is an entrepreneur, writer, video editor and Managing Partner of Lewis Notary Services Inc.  Daniel has recently obtained a license as a Financial Advisor.  If you wish to receive assistance with your business plan and receive a FREE financial review click here