Protecting Yourself from Notary Liability
A Notary Public faces many risks. The possibility of making errors while providing notary services is the primary risk. However, there are also exposures to signature forgery, deception on a fraudulent transaction, and unintentional laws that may be violated when providing notarizations. In this article, we will provide you with information on notary liability.
There are steps you can take to help protect yourself from the consequences of notary liability such as risks or mistakes.
1. Review the Documents Thoroughly
First and foremost, take your time when completing a notary transaction. Review the documents thoroughly so you understand what the transaction requires. Do not notarize incomplete documents. Also, make sure to fully verify the authenticity of the identification being presented by the signer(s). Make sure it matches the person sitting in front of you and properly witness their signature. Never notarize a document for a signer who is not present.
The most important thing you can do to protect yourself from notary liability by keeping a detailed notary journal. Your journal can be evidence to demonstrate you did your job correctly. More details of when, where, and how the transaction took place will help you if needed.
2. Stay up to date with the laws
Know your state’s laws and keep up-to-date with changes. Reference your state’s regulatory agency (Secretary of State) for updates and questions. Also, consider an affiliation with a notary organization that not only supports your state but can provide resources and tools to help you complete your notary services correctly and avoid notary liability.
In the event that you are sued, having errors and omissions insurance will help cover you as a notary. An error and omissions policy covers the insurer up to the policy limits. While this type of insurance covers you as the notary, you would also want to consider a surety bond which covers your client.
A surety bond guarantees that your client will get their money back if you make a mistake. You will have to reimburse the bond company or buy a replacement bond if a claim filed against your bond is paid. Some states may or may not require one or both of these types of coverage so make sure you know your state’s requirements.
There are ways that you can avoid exposure to liability. One of the most important is ensuring your notary seal/stamp is always kept in a secure location. This will help avoid loss and/or misuse of your seal. If your seal is lost, you should report it to the regulating department, most often that is your Secretary of the State. Of course, you would notify your employer if you are a notary public as part of your job responsibilities.
3. Protect your Notary seal
If your notary seal is stolen, it is recommended that you file a police report. Also, if you are bonded or carry errors and omissions insurance, you would want to notify them. Some states may issue you a new commission number when you replace your stamp. Either way, make clear notes so you can differentiate your new notary stamp from your old one.
Your notary seal is your responsibility and for your use only. It cannot be borrowed or used by others even if they may also be a notary public. It is a violation of the law for anyone other than you to use your notary tools. This holds true even if you are a notary at your regular job. Your employer may have paid for your notary tools and/or it is part of your job responsibilities but, your employer still has to follow the state-specific notary rules.
The best way to avoid liability is to mitigate as much as possible exposure to risks. Following these recommendations will help. Keep in mind things happen that are unavoidable or unexpected so having the proper insurance coverage is critical to protect yourself and your client.
Please see our article on Notarizing Loan Signings & Which Documents Need to Be Notarized.