In the frenetic world of business, it’s all too easy to find yourself entangled in a costly lawsuit or other legal issues for which you’re not to blame— which is why leading legal and business experts say coverage such as Errors and Omissions policies for Notaries is an essential safety net for entrepreneurs.
While some states require Notaries to post a surety bond to compensate a signer’s financial losses due to notarial error, these bonds don’t cover a Notary’s financial losses or court costs in a legal dispute. An Errors & Omissions (“E & O”) policy is needed if a Notary wants insurance against possible lawsuits.
“The primary benefit of E & O insurance is it affords Notaries both legal and financial protection while doing their jobs,” said surety attorney Richard Busch, who provides representation of Notaries in court cases on behalf of Merchant’s Bonding Company, a leading E & O policy provider. “Legal costs can be very expensive for a Notary, even if the Notary hasn’t done anything wrong. But if they have good E & O coverage, it protects them if they are sued for breaching a notarial duty since the insurer can set them up with an experienced attorney who can defend the Notary pursuant to the E & O policy.”
Lawsuits are a serious concern for persons who work as small businesses and independent contractors such as Notaries, said Elizabeth Milito, senior executive counsel with the National Federation of Independent Business’s Small Business Legal Center. “It’s critically important to maintain adequate insurance,” she said. “If a small business owner hasn’t been sued, they probably know somebody who has.”