Many people are confused over the differences between surety bonds and errors and omissions insurance. For Notaries, the differences are crucial.

Many states require Notaries to purchase a surety bond to protect their signers. A surety bond is a financial guarantee that a person who loses money because of a Notary’s misconduct or fraud will be reimbursed up to the bond’s limit.

A surety bond does not protect the Notary. If damages are paid to a signer out of a surety bond, the Notary is required to pay back the amount to the bonding company.

E&O insurance is designed to protect Notaries from liability. If a claim is made against a Notary, the E&O policy typically pays legal fees and losses up to the limit of the policy. You do not have to reimburse the insurance company for any costs incurred by a claim.

Unlike a Notary bond, E&O insurance covers negligent errors and omissions only; it does not cover criminal acts or frauds.

Regardless of your state’s bond requirements, it’s always a good idea to have an E&O policy because a claim can be made against you even if you have done nothing wrong.