Notary Insurance That You Need

Originally posted 3/31/23

So, you're starting a Notary business? How exciting! Also, you can probably find yourself a little overwhelmed with all the things you need to do to be an official business owner. I get it, I remember. It wasn’t so long ago for me. The overwhelming questions and things I had to get done - it was a lot to handle. Well, today I would like to help lessen that load on your to-do list by reviewing a couple of things about the types of Notary Insurance you should consider and the insurance you absolutely need.  

Let's talk about the necessities of a Notary. First is the Surety Bond. I am not 100% sure about all US state's rules for their Notaries, but most require notaries to purchase a surety bond. Click here for a list of states that required bond purchases and their details.

Surety Bond- Explained

DEFINITION: SUR•E•TY BOND

A surety bond is a contract between three parties—the principal (you), the surety (Bond Issued Company), and the obligee (the entity requiring the bond)—in which the surety financially guarantees to an obligee that the principal will act in accordance with the terms established by the bond.

The entity requiring the bond, in this case, is the state where you are being commissioned. The amount of this bond is different for each state. The length of its coverage should be the same as your commission. So what does the bond do?

The NNA ( National Notary Association) Provides this explanation, which I feel answers this question perfectly:

A Notary bond protects the public from financial harm in the event you, the Notary, make a mistake or omission, or perform a wrongful act in notarizing a document that causes any personal financial harm. By issuing a bond, the surety company guarantees that you will perform your duties as a Notary Public in accordance with the law. If you do not, the company will pay the financially injured person any damages up to the amount of the bond. Bond limits are set by each state individually.

As you can see the Surety Bond isn’t really insurance to protect you. It's there to protect the public against mistakes you make that cause them to experience financial injury. If a claim is made and the surety determines it has merit, it will pay a portion or all of the claim. It may also require you, the notary, to pay back that amount. That potential issue is why you will want and need the next insurance.

E&O- Errors and Omissions

A Notary E&O policy protects you should you make an unintentional error or omission when notarizing that financially harms the public. An E&O policy can provide you protection from these and other possible losses and risks:

• Financial damages due to a notarization error or omission filed against your NNA bond.

• Unintentionally violating the law while notarizing.

• Being named in a lawsuit even if you did nothing wrong.

• An imposter counterfeiting your commission information and forging your signature on a document without your knowledge.

Policies cover your legal defense by an attorney with expertise in Notary law in addition to your claim, legal fees, and court costs, up to your policy coverage amount. And there’s no deductible or repayment of losses. -Nationnotary.org

The amount of your E&O policy coverage will depend on what you’ll be doing with your commission. If you plan on being a loan signing agent and hope to work directly with title companies, you will need a bigger plan than if you weren't. The average loan signing E&O policy should be around 50-100K. I don’t think I have ever seen a title office require more than 100K.

Now you can get your E&O from the NNA, but if you need more coverage because of your plans to be a loan signing agent, I would recommend you go with Biberk. You can pay a very reasonable monthly fee for a large policy if you so wish. Check them out here.

Additional insurance you should think about as a business owner could include:

• General Liability- General liability insurance policies typically cover you and your company for claims involving bodily injuries and property damage resulting from your products, services, or operations. It may also cover you if you are held liable for damages to your landlord's property.

• BOP- Business Owner Policy- A business owners policy (BOP), combines various insurance coverages – such as commercial property insurance, general liability, and business income – into one convenient policy.

• Workman's Comp- If you are planning on having employees- Workers' compensation provides benefits for workers when their injury or illness arises out of or is caused by their work. Workers' compensation may also pay medical bills and benefits for temporary or permanent disabilities.

• Vehicle/Commercial- Commercial Auto Insurance covers vehicles used for business and the people who drive them. If you or a driver of your business vehicle causes an accident that injures another person or damages their property, they can file a claim on your policy and bring a lawsuit against you or the driver.

• Business Property Insurance- Business property insurance covers your buildings, the contents within those buildings, and loss of income if you're out of business due to a claim. It can help protect your business in case of unexpected accidents or tragedies like fire, theft, wind damage, or even a building's collapse under the weight of snow.

• Cyber Liability- Cyber liability insurance is an insurance policy that provides businesses with a combination of coverage options to help protect the company from data breaches and other cyber security issues. It's not a question of if your organization will suffer a breach, but when.

The choice to get other insurance policies outside of the two required lies squarely on your shoulders. For any and all of these policies, I would highly encourage you to discuss them with Biberk. I have found them to be incredibly helpful. Just do yourself a favor and don’t get more insurance than you need.

For me and my business, I started with my Bond and 1Million in E&O coverage. I have an auto policy through State Farm Mutual Insurance Co which also covers my rental insurance. I am currently looking at adding general liability and cyber liability with my upcoming online notary courses coming soon.

All the choices you make for your business need to be yours. There are lots of us out here telling you the best way to do things, but the truth is, what's best for you, only you know. However, if after reading this and adding any other research you’ve done, you still have some questions- I am here to help. You can send me an email, or send a text- or if you’d like some time to chat on the phone, you can schedule a free 15-minute phone call here.

Also- if you are interested in a notary training course on setting up your new business I will have my course launched in early May. If you are interested please send me an email- in the subject line write- Notary Biz Course. You can send that here.

Either way, I hope this was helpful and I am looking forward to your journey as a new notary.

Jennifer K. Cooper- JKC Mobile Notary