E & O Insurance for Notaries
Errors and Omissions (E&O) Insurance is one of the most important protections a notary can have. While notaries are required in many states to carry a notary surety bond, that bond protects the public—not the notary. E&O insurance, on the other hand, protects the notary from personal financial liability if a mistake occurs during a notarial act. Because even a small clerical error can result in costly disputes or lawsuits, E&O insurance provides essential coverage and peace of mind for both new and experienced notaries. This article explains what E&O insurance covers, how it differs from a notary bond, why notaries need it, what limits are available, and how to choose the right policy.
What Is Notary Errors and Omissions Insurance?
Errors and Omissions Insurance is a type of professional liability insurance designed specifically for notaries. It protects the notary when they make an unintentional mistake, omission, or are accused of negligence during the notarization process. If a client experiences a financial loss and holds the notary responsible, E&O insurance can cover legal defense costs, settlements, and damages up to the policy limit.
E&O insurance fills the gap left by notary surety bonds. A surety bond reimburses the public when a notary’s mistake causes harm, but the notary must then repay the surety company. E&O insurance protects the notary directly by covering financial obligations without requiring repayment.
Notary Bond vs. E&O Insurance
A common point of confusion for many new notaries is the difference between a notary surety bond and E&O insurance. Although both relate to notarial performance, they function very differently.
Purpose of a Notary Bond
A notary bond is designed to protect the public from financial harm caused by a notary’s error, negligence, or misconduct. If a claim is paid, the notary is obligated to reimburse the surety company for the amount it paid out. The bond ensures accountability but offers no protection for the notary.
Purpose of Notary E&O Insurance
E&O insurance covers the notary. If a claim is made alleging that the notary caused financial damage through an error or omission, the policy can cover legal defense costs, settlements, and other damages. Unlike a bond, the insurer does not seek repayment from the notary for covered claims.
Key Differences
- A bond protects the public; E&O protects the notary.
- Claims on a bond must be repaid; E&O claims do not require reimbursement.
- Bonds are required by law in many states; E&O is optional but strongly recommended.
Understanding this distinction is important because many notaries assume their bond protects them personally, which it does not.
Why Notaries Need E&O Insurance
Notaries face a unique risk profile. Small, unintentional errors—such as a missed signature, incomplete certificate wording, or improper identification—can lead to financial harm for clients. Even if the notary did everything correctly, accusations of negligence can still result in legal action.
Notaries who handle real estate or loan documents face even higher stakes, as transactions often involve substantial financial value. A single mistake in a loan package could delay closing or create financial complications, exposing the notary to potential liability.
E&O insurance ensures that if a claim arises, the notary has financial protection for legal costs and potential damages. Without coverage, a notary could face substantial personal liability, even when the error was unintentional.
What E&O Insurance Covers
E&O insurance is designed to cover unintentional mistakes and omissions that occur during the course of notarization. Typical coverage includes:
Professional Mistakes
- Incorrect certificate wording
- Using the wrong notarial act
- Missing a required signature
- Misstating the date of notarization
- Errors in administering an oath or affirmation
Financial Losses Suffered by Clients
If a client loses money as the result of the notary’s error, E&O insurance can cover reimbursable damages up to the policy limit.
Legal Defense Costs
If a notary is sued, E&O can cover attorney fees, court costs, and settlements—even if the claim is ultimately found to be groundless.
Coverage varies by provider, but most policies protect the notary from the financial consequences of honest mistakes that occur while performing authorized notarial acts.
What E&O Insurance Does Not Cover
E&O insurance does not protect against every possible risk. Common exclusions include:
Intentional Misconduct or Fraud
If a notary knowingly violates the law, acts with intent to deceive, or assists in fraud, E&O will not cover the claim.
Criminal Behavior
Criminal acts are never covered by E&O policies.
Non-Notarial Work
For notaries who also work as signing agents, tasks beyond notarization—such as explaining loan terms or preparing documents—may not be covered unless specifically included in the policy.
Work Outside Policy Period
Claims-made policies require the error and the claim to fall within active coverage dates unless retroactive coverage exists.
Understanding these exclusions helps notaries avoid coverage gaps.
Coverage Limits and Policy Options
E&O coverage for notaries is available in a variety of limits, depending on the notary’s risk level and the type of work they perform.
Common Coverage Limits
- $10,000
- $25,000
- $50,000
- $100,000 or more for signing agents
Many states suggest coverage amounts based on typical risk levels, but notaries performing high-volume or high-value notarizations should consider higher limits.
Claims-Made vs. Occurrence Policies
Most notary E&O policies are claims-made, meaning the coverage applies only if the claim is filed during the policy period. Occurrence-based policies cover events that occurred during the policy period, regardless of when the claim is filed, but these are less common.
For signing agents, specialized E&O policies that cover non-notarial signing tasks may also be available.
Cost of E&O Insurance for Notaries
The cost of E&O insurance varies depending on several factors:
- Coverage amount
- Notary’s experience
- Number of notarizations performed
- Whether the notary also acts as a signing agent
Lower-limit policies are often inexpensive, while higher-limit policies or policies covering signing-agent activities may cost more. Even with higher coverage, E&O is generally affordable compared to the potential cost of defending against a claim.
When Notaries Should Strongly Consider E&O Coverage
While E&O insurance is beneficial for all notaries, certain situations increase the need for coverage:
- Frequent notarizations or high-volume workflow
- Work involving real estate, mortgages, deeds, or powers of attorney
- Serving as a notary signing agent
- Being newly commissioned or still becoming familiar with notarial procedures
- Operating in states with high financial risk for notarial errors
The more frequently a notary handles high-value or time-sensitive transactions, the more essential E&O coverage becomes.
Common Misconceptions About Notary E&O Insurance
“My notary bond covers me.”
A notary bond protects the public; the notary is required to repay any claims. E&O protects the notary personally.
“I only notarize a few documents—E&O isn’t necessary.”
Liability can arise from even a single mistake, regardless of frequency.
“Claims only happen if I break the law.”
Unintentional mistakes or misunderstandings can still lead to legal action.
Recognizing these misconceptions helps notaries make informed decisions about protecting their professional liability.
How to Choose the Right E&O Insurance
Selecting the right policy depends on the type and volume of notarial work performed. Notaries should consider:
- Coverage amount appropriate for the financial risk of their typical documents
- Whether they also need coverage for signing-agent tasks
- The type of policy offered (claims-made vs. occurrence)
- Exclusions or limitations within the policy
- Premium costs compared to financial exposure
Notaries who routinely handle real estate or loan packages should generally choose higher limits, while notaries with limited or lower-risk work may choose modest levels of coverage.
Frequently Asked Questions
Is E&O insurance required by law?
No. Most states require a notary surety bond but do not require E&O insurance.
Does E&O cover intentional wrongdoing?
No. Fraud, criminal behavior, and intentional misconduct are excluded.
How much E&O insurance should I buy?
It depends on the type of work you perform. Many professionals recommend selecting coverage limits higher than your bond amount.
Does E&O insurance cover notary signing agent work?
Standard notary E&O may not cover signing-agent tasks; specialized policies may be needed.
Will my premium increase after a claim?
Premiums may increase depending on insurer policies and claim history.
Conclusion
Errors and Omissions Insurance provides critical protection for notaries by covering financial losses and legal expenses arising from unintentional mistakes during notarization. While notary bonds protect the public, E&O protects the notary’s personal and professional assets. Whether a notary handles occasional notarizations or frequent real estate signings, E&O insurance offers valuable coverage that reduces liability and enhances professional security.
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