A Notary provides a valuable service to the public. But if one of your notarizations is challenged, who protects you? If you don’t have a Notary errors and omissions (E&O) insurance policy, you’re on your own.
While most Notaries will never have a claim made against their E&O policy, it's important to know what to do if it happens to you. In this guide, you’ll understand how E&O insurance works and how much coverage you may need.
How Notary E&O insurance helps you
The decision to buy E&O insurance is personal and depends on your circumstances, yet a policy can protect you from:
- Financial damages due to an error or omission that otherwise would be paid from your Notary surety bond, if your state requires one
- Financial damages due to unintentionally violating the law while notarizing
- Defense costs from being named in a lawsuit even if you did nothing wrong
- Damages to a lender or property owner when your forged seal and signature mysteriously appear on a document conveying title to real property
What E&O insurance covers
Typically, E&O insurance covers the amount of the claim against you and, in most states, attorney fees and court costs up to the policy limit. In some states, E&O policies have separate limits for legal expenses.
What an E&O policy covers:
- Failure to spot an imposter with a fake ID
- Mistakes or omissions in notarization
- Allegations of negligence during notarization
- Damages from a mistake or omission filed against your surety bond, if your state requires one*
- Being named in a lawsuit even if you did nothing wrong (e.g., your seal was stolen or signature was forged)
What an E&O policy doesn’t cover:
- Dishonest, fraudulent, criminal, libelous, slanderous, or malicious acts and omissions
- Bodily injury to, or sickness, disease or death, including mental distress
- Injury to or destruction of tangible property, including loss of use of property
- Fines or penalties imposed by law
- Punitive, treble, exemplary or similarly categorized damages, including fines and penalties
- Willful or intentional disregard of Notary and other laws
Does every Notary need E&O insurance?
While Notary E&O insurance is not required for most Notaries**, it’s strongly recommended. If you notarize documents as part of your job, ask your employer if their insurance policy covers you when performing notarizations. It may only cover you for notarizations performed as part of your work duties, so you still may need an E&O policy if you notarize outside of work.
If you’re a Notary Signing Agent or self-employed Notary, an E&O policy is your only financial protection against losses from claims.
E&O coverage
The amount of E&O insurance you need as a Notary is based on your needs. The Signing Professionals Workgroup recommends Notaries take out a $25,000 E&O insurance policy. Some companies, however, may require Signing Agents to carry more coverage.
For Notaries engaging in general Notary work, an E&O policy should be sufficient to cover the amount of your bond, if required, plus coverage for additional expenses. For example, if the amount of your bond is $15,000, a $25,000 policy should be adequate.
When deciding on an E&O coverage amount, consider the assets you have and how much insurance you might need to protect them.
When does E&O coverage end?
This depends on the type of policy you have. There are two types of E&O insurance policy:
- Occurrence-based policy. You’re covered for notarizations performed when the policy was in effect, regardless of when the claim is filed. If a claim arises after you stop being a Notary, you’re still covered as long as the notarization took place during the policy period.
- Claims-made policy. You’re only protected if the claim is filed while the policy is in effect. Once you stop paying premiums, you lose coverage unless you purchase what is known as “tail coverage,” which extends the reporting period for claims.
Cost of E&O insurance
Premiums vary by state as well as the amount and term of the policy. You can get a quote from any insurance agent or broker licensed to sell property and casualty insurance.
As noted above, a benefit to obtaining your E&O policy from the same company as your bond is that the company can generally pay any claims and expenses out of your E&O policy before the bond, provided the loss is covered under the E&O policy. This protects the Notary from having to pay the company back for a loss paid out of the bond.
Additionally, it safeguards Notaries in states that require bonding companies to report claims paid from the Notary’s bond to the commissioning official or that require the Notary’s commission to be suspended until the Notary secures a new full bond.
*If your bond, if required, and policy are with the same carrier.
**Required in Florida for online Notaries; Louisiana Notaries may file a bond or policy