What states require Notary’s to have a bond?
The following states require Notaries to purchase and maintain surety bonds:
- Alabama – $25,000 Notary surety bond for 4 years
- Alaska – $2,500 Notary surety bond for 4 years
- Arizona – $5,000 Notary surety bond for 4 years
- Arkansas – $7,500 Notary surety bond for 10 years
- California – $15,000 Notary surety bond for 4 years
- District of Columbia – Notary surety bond $2,000 for 5 years
- Florida – $7,500 for 5 years
- Hawaii $1,000 Notary surety bond for 4 year commission
- Idaho – $10,000 Notary surety bond for 6 years
- Illinois – $5,000 Notary surety bond for 4 years
- Indiana – $25,000 Notary surety bond for their 8-year commission
- Kansas – $12,000 Notary surety bond for the duration of their 4-year commission
- Kentucky – $1,000 Notary surety bond for the duration of their 4-year commission
- Louisiana – $10,000 Notary surety bond or errors & omissions insurance (E&O) every five years
- Michigan – $10,000 Notary surety bond for 6-year commission
- Mississippi – $5,000 Notary surety bond for 4 years
- Missouri – $10,000 Notary surety bond for 4 years
- Montana – $25,000 Notary surety bond for 4 years
- Nebraska – $15,000 Notary surety bond for 4-year commission
- Nevada – $10,000 Notary surety bond for 4-year commission
- New Mexico – $10,000 Notary surety bond for 4 years
- North Dakota – $7,500 Notary surety bond for 4 years
- Oklahoma – $1,000 Notary surety bond for 4 years
- Pennsylvania – $10,000 Notary surety bond for 4 years
- South Dakota – $5,000 Notary surety bond for 4 years
- Tennessee – $10,000 Notary surety bond for 4 years
- Texas – $10,000 Notary surety bond for 4-year commission
- Utah – $5,000 Notary surety bond for 4-year commission
- Washington – $10,000 Notary surety bond for 4 years
- Wisconsin – $500 Notary surety bond for 4 years
- Wyoming – $500 Notary surety bond for 4 years
What’s the purpose of a Surety Bond?
A surety bond is a type of guarantee from an insurance company that ensures the performance of an individual or organization. Surety bonds are commonly used in industries such as notarization, construction, transportation and manufacturing, where they can be required by law. In some states, contractors must obtain a surety bond before they can legally do business.
The purpose of surety bonds is to protect consumers from unethical or dishonest businesses, as well as to provide businesses with a means of recovering losses in case a contract is not fulfilled. Surety bonds also help to prevent fraud and other illegal activities. A surety bond ensures that all parties involved will adhere to the terms of their agreement. If one party fails to do so, the surety bond allows the other party to collect damages from the insurer, up to a certain limit.
Surety bonds can provide consumers with peace of mind knowing that their rights and interests will be protected in any situation. In addition, surety bonds help businesses build trust by demonstrating their commitment to meeting their obligations. Surety bonds help to create a level playing field for businesses by ensuring they compete fairly and ethically.
Ultimately, surety bonds are an important tool for businesses and consumers alike, as they provide added security in the performance of contracts. They can also serve as a powerful deterrent to misbehavior and fraudulent activities. Surety bonds are often required by law to promote trust, fairness and accountability among all parties involved in a contractual agreement.
How is Errors & Omissions Insurance different from a Bond?
Errors & Omissions Insurance (E&O) is a type of business insurance that covers professional services firms and professionals for negligent acts, errors or omissions related to the performance of their services. For notaries they make specific Notarial E&O insurance. This Notary insurance does not guarantee payment to third parties like bonds do; instead, it pays for costs incurred if the insured individual or firm is sued for professional negligence.
Unlike surety bonds, which are a guarantee of financial responsibility, E&O insurance does not guarantee payment to third parties; instead, it pays for costs incurred if the insured individual or firm is sued for professional negligence. For example, if a lawyer fails to file an important document on time and as a result their client suffers a financial loss, the E&O policy would cover their defense costs and any settlement that results from the lawsuit.