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Notary Liability: Myths Vs. Facts

Updated 8-15-22. Notary law can be complicated, mysterious and intimidating — especially to nonlawyers. Not surprisingly, myths abound among Notaries concerning their liability. Here’s what you need to know about them.

1. MYTH: Because the fees which Notaries may charge are so small, you will never be sued or you will not be sued for substantial amounts of damages.

Fact: Although Notary fees are modest (ranging mostly between $5 and $15), you face full and unlimited liability for any financial injuries due to your faulty performance of official acts. Notaries have been sued for tens of thousands and even hundreds of thousands of dollars (or more).

2. MYTH: You are not liable for bad acts committed by others using your Notary tools.

Fact: If you negligently allow someone to borrow or steal your seal and that person uses it to create a false notarization, which in turn causes financial injury, you will be liable for the forged notarization. In another example, if you negligently allow someone to borrow or steal your Notary journal and that person uses a customer’s personal identifying information to commit document fraud or identity theft, you will be liable for the resulting financial injuries.

3. MYTH: You have civil liability even if no financial injury results from your faulty actions.

Fact: If a faulty notarization does not cause financial harm to anyone, then there is no reason for anyone to make a claim or to file a lawsuit for damages against you. It is like the old basketball saying: “No harm, no foul.” Many Notary mistakes are minor or technical errors or omissions, and many are never even discovered or are not serious enough to prevent the notarized document from being accepted or utilized.

4. MYTH: Your liability due to a faulty notarization is limited only to a document signer.

Fact: In addition to document signers, other persons or parties may suffer financial injuries due to faulty notarizations. For instance, a party could be injured financially if a transaction of some kind was invalidated by a faulty notarization after money has been spent or has changed hands. So, anyone who is financially harmed by a faulty notarization could claim damages or sue.

5. MYTH: You will not have liability if you do not charge a fee for the faulty notarial service.

Fact: You must follow the law whether or not a fee is charged. Even if you are an unpaid volunteer performing notarizations free of charge, you are still responsible for abiding by all laws regarding notarial services.

6. MYTH: If you perform notarizations on behalf of your employer, you will not have liability because your employer’s insurance will cover any damages caused by your faulty notarizations.

Fact: You are the commissioned public official, not your employer. Therefore, in all instances, you will have primary liability for notarization mistakes. Even if you do something wrong because your employer told you to do it, you will be still liable for the error or omission. It is quite possible that both you and your employer will have joint liability for financial damages resulting from notarial misconduct, but you will always face such liability.

7. MYTH: If your employer has errors and omissions (E&O) insurance or malpractice liability insurance, you are protected by such insurance.

Fact: Maybe not. It depends on how the insurance policy is written. The scope of insurance coverage is limited by exclusions. To illustrate, some law firm malpractice liability insurance policies expressly exclude coverage for Notary malpractice. You should respectfully ask your employer to confirm that their insurance policy includes Notary errors and omissions protection for you.

8. MYTH: Your Notary bond protects you against legal liability.

Fact: A Notary bond is not an insurance policy and does not work like insurance. A Notary bond protects the public, not the Notary, and only up to the maximum bond amount. Thus, a $10,000 Notary bond provides the public with protection up to the relatively small sum of $10,000. If a claim is paid against your bond, the surety company is entitled to seek reimbursement from you. So, it may be advisable to consider buying a separate Notary E&O liability insurance policy.

9. MYTH: Although you may face civil liability, you will not face additional administrative or criminal liability for mistakes and misconduct.

Fact: To the contrary, if you make a negligent or intentional mistake (even if no financial injury is caused to anyone), you may also face criminal and/or administrative consequences. It is considered official misconduct when a public official (such as a Notary) fails to abide by the law or to perform a required official duty (such as a notarization) — which in most states can be punished as a crime. It also can be grounds for the commissioning or oversight agency to sanction the Notary. Penalties can include censure, fines or the suspension or revocation of the Notary commission.

The risk of Notary liability is a very serious matter. But it is a simple matter to protect yourself: Know and abide by your state’s Notary laws and regulations; maintain a detailed Notary journal that documents your diligence and reasonable care; and proofread and double-check all your work before concluding each notarization.

Michael Closen is Professor Emeritus at the John Marshall Law School in Chicago, Illinois. A respected consultant on model Notary statutes and legislation, Closen served on the drafting committees for The Notary Public Code of Professional Responsibility and various editions of the Model Notary Act, and recently authored the book, Professor Closen’s Notary Best Practices.

 

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15 Comments

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Kathleen Rossin

08 Nov 2016

Vicarious Employer fraud

Matt Miller

12 Aug 2019

All these new RON notaries are going to find out that the platforms (notarize, safedocs, etc.) will push all liability down to the notary. Good luck remote notaries.

Suzanne Feinberg

14 Aug 2019

It seems like no matter what - the notary is the responsible party. It also seems like the E/0 insurance most of us have will never be enough for that one time we need it. Maybe laws need to be changed to allow for secondary parties to be partially responsible. If you work through a signing company and there is a computer error or something out of your control - you shouldn't have to be totally responsible - especially with an omission.

Ms. B

01 Oct 2019

Need an attorney in Detroit, MI to handle my case which may end up as a class action suut against a notary and his shell companies buying properties from county tax auction and taking advantage of Detroiters! False Notary stamp showing incorrect County of Commmisssion....partner signing for Notary used his forged stamp multiple contracts and caused me a sever financial loss.

Leonard Wooten

10 Aug 2020

Is Michigan one of the states that has specific wording that must be used for notary acknowledgements and jurats

National Notary Association

11 Aug 2020

Hello. According to the Michigan Secretary of State's Notary Manual (https://www.michigan.gov/sos/0,4670,7-127-1633_95527_95529_95663-509836--,00.html#Notzn%20Type), a notarial certificate in Michigan must contain the following elements: Notary Public - State of Michigan Notary Name – exactly as commissioned Date of Notarization County of Commission Commission Expiration Date Acting in the County of _______. (Included when performing a notarial act outside of the Notary’s county of commission) Notary Signature - exactly as commissioned. Electronic or Remote Notarization statement if appropriate.

Alice Hart

10 Aug 2020

This article does not address liability for RON electronic notarial tasks. Also when multiple states involved should a case go to court, determination state of venue.

Chris Parreira

10 Aug 2020

I am a calif notary and I currently have a $100k e and o policy. If I ever decide to not renew my commussion and of course my insurance policy, will I be covered if someone tried to sue me at a later time?

National Notary Association

11 Aug 2020

Hello. That would depend on the details of your E&O policy coverage. You may wish to contact your E&O provider for assistance. If you obtained your policy through us, please contact our Customer Care team at 1-800-876-6827 and they should be able to direct you to someone who can assist you.

Yvette McKiever

13 Mar 2021

I was told by another notary that the E&O insurance that I purchased through the NNA ( Merchant Bonding Co.) is only good for general notary work not NSA work. Is this true?

National Notary Association

15 Mar 2021

Hello. Notary E&O purchased through the NNA will cover errors and omissions related to any document you notarize in any industry, such as real estate, probate, healthcare, education, insurance, financial services, etc. So, yes, our E&O will cover notarial acts performed by a Notary Signing Agent. Our Notary E&O policy only will cover acts one performs as a Notary Public. If, as an NSA, you make an error on a non-notarized document in the loan package or if the shipment of documents gets lost and it is the NSAs fault, our E&O policy will not cover that. If an NSA wants broader coverage for all acts the NSA performs, they should consider obtaining a Notary Signing Agent errors and omissions policy. However, NSAs should carefully read the NSA E&O policy form carefully. Many of these policies are written very narrowly to NSA work or real property documents, so if the NSA also is a mobile Notary and performs non-NSA and real estate notarizations, the NSA errors and omissions policy may not cover those notarial acts.

Linda Ann Frezza

22 Aug 2022

the NNA should - as an educational entity - inform all notaries of all the E & O insurance covers and when they renew as a signing agent - make available to them all the coverage they will need to keep from having to pay out if they are sued. This should be a complete package to a "full charge" notary for their particular state - all notary signings - whatever is done in their state

Betty J Dedman

22 Aug 2022

Either be afraid to do notary work, or train yourself to perform a clean witness. Here are a few things I have learned in the last decade by establishing good habits. --Print and check your print job page by page against the PDF, so you don't miss any documents, INCLUDING the signer's copy. If the signer is elderly, print extra signature pages in case of errors. --Find out when you confirm, or agree with an individual (like a simple POA,) if there needs to be a witness. I can provide multiple witnesses for any signing IF it is performed at my spouse's Law Office. Some signers have no idea if their neighbor is available to witness and you could waste 1/2 a day looking for one, and they will insist on their home as a signing location. --When you are able to print before a signing, you may complete your own notarized section of a document, including your signature and the stamp, prior to the signing. The paper is meaningless until the borrower, seller, signer signs/dates it and you can control the surface where you stamp. --Ask to see a Current government issued photo ID before you begin. (Also, check the 2nd ID, if required for the signing.) Identify the signer more with the signature, than with the photo. Nobody can quickly write a forged signature. Complete this in your journal BEFORE your begin the signing. --Check your paperwork a 3rd time when you go back to my car BEFORE you leave the signing location. Your focus is always better there, and you can go back and knock on the door to correct something missed. --Affix the shipping label to the UPS or FedEx packaging as soon as possible before the signing, instead of At the UPS or FedEx ship center. Package ALL paperwork before you walk into the shipment center. I always use 2, and sometimes I use the cardboard packaging and package That inside of the plastic packaging. I like paperwork flat. I also write, "Smith, 08-22-22, Paris", the signer's name, shipment date, town, on the shipping label. When I have multiple signings in a single day, I put all of the signing paperwork in it's own plastic legal sized envelope, that has it's own label, "Smith, 08-22." Paperwork doesn't get shipped to the wrong place this way.

David Lloyd Pendergrass

22 Aug 2022

It does not matter a bit if I as a notary do everything just right. If someone decides to sue me, they can. They might not win, but I still have to go through the financial burden of defending myself.

Lucille Ybarra

23 Aug 2022

Word of advice. Keep your E&O amount private. Unscrupulous ppl are ambulance chancers too. Contriving false allegations to cash in on your E&O. If you are required to carry a large amount of E&O coverage, make it in $25k increments to deter false claims against you.

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