Notaries today are increasingly being named in lawsuits, even when they have performed their duties properly. As a result, Notaries take personal responsibility for strictly following best practices, keeping thorough journal records of their notarizations, and maintaining a personal Errors and Omissions (E&O) insurance policy to cover legal costs of liability. To help weed through some of the commonly held misconceptions about Notary liability, the Notary Bulletin pulled together pertinent facts and figures to help make sure you’re covered.
Myth: If state law requires a Notary to take out a surety bond when commissioned, the Notary is protected against lawsuits.
Fact: A surety bond protects the public — not the Notary — from financial damage resulting from a flawed notarization. Notaries are required to reimburse the bonding company for any damages paid from a surety bond. So if $500 in damages was paid out from a bond to a third party who was damaged by a problematic notarization, the Notary would then be required to reimburse the bonding company $500. Currently 30 states, five U.S. territories and the District of Columbia require that Notaries carry a surety bond. A Notary must voluntarily obtain an E&O policy in order to cover personal legal costs and liability expenses resulting from a lawsuit.
Myth: Notaries can only be sued for small amounts of money.
Fact: There is no limit on the amount of damages a Notary may be sued for. In the case of Vancura v. Katris in Illinois, a Notary accused of careless practices that resulted in a forged signature paid a $30,000 settlement out of his own pocket — six times the required surety bond amount for Notaries in the state.
Myth: Employer insurance policies automatically cover their Notaries if any legal problems arise.
Fact: Some employer malpractice or liability insurance policies specifically exclude employee-Notaries from coverage, says Notary legal scholar and attorney Michael Closen. “It’s important for Notaries to inquire about an employer’s insurance policy and find out if they are covered under it or not,” Closen said.
Myth: Notaries can’t be named in a lawsuit if they didn’t participate in a transaction.
Fact: Unfortunately, there have been documented cases of Notaries who were named in lawsuits or accused of negligence because the Notary’s seal, name or commission information was copied or stolen and used without the Notary’s knowledge. In some cases, Notaries were able to defend themselves successfully against these accusations by keeping accurate, well-maintained journals of their acts that provided evidence the actual Notary was not involved in any negligent or dishonest activity.