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Do Notaries Public Need E&O Insurance to Operate in California?

Nov 19, 2020 · 4 minutes to read

Happy Notary Public business persons

In the State of California; one of the most populated states in U.S., Notaries public usually needwo main types of insurance. They don’t just require a surety bond to be secured with the state, they also require E&O Insurance.

Surety Bonds

The state of California requires notaries to purchase a $15,000 bond in order to protect the public financially. This is to prevent the financial consequences of a negligent mistake or intentional errors. Since it’s state required, the bond can be easy to order from various organizations or companies.

What is a Notary Bond for?

Know that the Surety bond you purchase is purchased for the public. It is an assurance that any error that you make doesn’t irrevocably harm the public in any way. It’s not a judgment on your skill or your ability; it’s just a precaution. Human error, as we’ve seen throughout history, is bound to catch up with even the most skilled professional.

Hence a bond doesn’t qualify as insurance protection for you. Unintentional mistakes, negligent omissions, and human errors are unfortunately part of the business. Insurance is something that protects you, however.

Insurance can actually help you pay back your surety bond since it is usable by your customers or clients. You can also be held responsible for any costs that are above the amount of your bond. These include court costs, legal fees, as well as other expenses.

Errors and Omissions Insurance

Notaries don’t require Errors and Omissions insurance by law in order to operate in California. However, the nature of the work of notaries is such that they should strongly consider getting it. Errors and Omissions insurance is specifically designed to protect notaries if they make an unintentional mistake. It is also designed to protect them if they are the victim of a false claim.

Not having this insurance in the case of a false claim, or even a legitimate one would cost you thousands. If the lawsuit is false, then it would require you to pay thousands of dollars just to prove your innocence. In other words, even if you acted responsibly, you’d still be losing a lot of money.

The coverage of this policy extends to legal defense costs, legal fees or court costs as well as your claim.

Why is it Important?

Errors and Omissions insurance is so important because it takes only one act of negligence to lose your money. That’s not even the extent of the damage as notaries have lost their savings, their home, and even their businesses. Notaries public aren’t just known for their services and their expertise, but for their trust.

The public trusts them to notarize and approve several documents that are very important. The errors and omissions insurance protects them from slip ups. Protecting yourself isn’t even that expensive since that insurance is quite affordable.

The worst part is that whatever omission that has occurred may not even be your fault. You may not have done anything wrong.

The fact that Errors and Omissions insurance isn’t required by law shouldn’t put you at ease. Lots of insurances aren’t required by law, but you get them to be safe. One of these is health insurance and another is house insurance. You can live all you want without any insurance, but when the law of averages catches up, you’ll need it.

What Losses are Covered by E&O Insurance?

The Errors and Omissions insurance cover the costs of claims, lawsuits, and financial loss as a result of unintentional errors. This is up to the policy limit. Damages are paid out to the party that has been injured or been financially damaged. Settlements and judgments are paid to the party whether settled out of court or through a judgment.

However, attorney’s fees and court costs as well as other defense costs are also absorbed. Policies can also be used to the loss on your bond. If the claim isn’t valid, you could still be faced with court costs.

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