Notary E&O Insurance FAQs
What is notary E&O insurance?
Notary Errors and Omissions Insurance, often abbreviated as Notary E&O Insurance, is a type of professional liability insurance designed to protect notaries public from legal claims and financial losses resulting from mistakes, errors, or omissions they make while performing notarial acts. Notaries are responsible for verifying the authenticity of signatures, witnessing the signing of documents, and performing other related tasks to prevent fraud and ensure the legality of documents.
This insurance helps cover legal expenses, court costs, and damages in case a notary is sued by clients or other parties due to errors or mistakes in the notarial process. It’s important for notaries to have this insurance as a safety net to protect themselves from the financial impact of potential legal claims.
Should I have notary E&O insurance?
E&O insurance protects you from mistakes that can happen with any notarization. If you do not have notary E&O insurance, and you are sued for financial harm, you will have to pay out of pocket to reimburse the bond company.
Is E&O insurance required by law?
Notary E&O insurance is not required by law. However, E&O insurance is highly recommended by most state governments, notary organizations, and working notaries.
Mistakes happen. You do not want to find yourself having to pay $15,000 out of pocket, just because you overlooked a signature. E&O insurance helps to protect you from finding yourself in this situation.
Doesn’t a notary bond protect me?
No. A notary bond protects the public. If you are sued, and the bond company pays the claim, you will have to reimburse the bond company out of pocket.
Does notary E&O insurance pay for legal fees?
Yes, Notary Errors and Omissions (E&O) insurance can cover legal fees and expenses in certain situations up to the policy limit. Notary E&O insurance is designed to provide financial protection to notaries in case they make mistakes or omissions that result in financial losses for their clients or other parties. This type of insurance can help cover legal costs if a notary is sued for errors or negligence related to their notarial duties.
Notary E&O insurance can vary depending on the policy terms and conditions. Different insurance providers offer different levels of coverage and may have specific exclusions or limitations. Notary E&O insurance does not typically cover intentional misconduct, criminal activities, or fraudulent acts.
If I’m sued, what does Notary E&O Insurance cover?
Notary Errors and Omissions (E&O) Insurance is designed to provide coverage for legal claims and financial losses that may arise from mistakes, errors, or omissions made by a notary public while performing their duties. The specific coverage details can vary depending on the insurance policy and the terms of the coverage, but generally, notary E&O insurance can cover the following:
- Legal Defense: If a notary is sued by a client or another party due to a mistake or error in notarizing a document, the E&O insurance policy may cover the legal defense costs. This can include attorney fees, court costs, and other related expenses.
- Settlement Costs: If the case is settled out of court, the E&O insurance policy might cover the settlement amount as well as any associated legal expenses.
- Judgments and Damages: If the lawsuit results in a judgment against the notary, the E&O insurance policy may cover the awarded damages up to the policy limit. This can include compensatory damages, as well as legal costs associated with the case.
It’s important to note that E&O insurance typically has coverage limits and deductibles, and the specific terms of coverage can vary from one insurance policy to another. Not all claims or situations may be covered, and certain exclusions might apply. Therefore, it’s essential to thoroughly review and understand the terms of your E&O insurance policy.
How do I know when my E&O insurance expires?
To determine the expiration date of your Notary Errors and Omissions (E&O) Insurance policy, you should refer to the policy documents that you received from your insurance provider. If you purchased your notary bond and your E&O insurance together from Notary.net, your E&O policy will most likely expire when your notary commission expires.
How do I purchase notary E&O insurance?
You can purchase insurance easily on Notary.net. Select your state from the Notary Supplies menu, click on the red Supplies button, then click “Notary Bonds and Insurance.”
Can E&O insurance be sent by email?
Yes. Notary errors & omissions insurance can be emailed.
When will I receive my E&O insurance policy?
Notary E&O insurance is sent out at the end of the business day.
How much E&O insurance should I get?
We recommend that your E&O insurance policy matches the amount of your state-required notary bond. For exmaple, if you have a $15,000 notary bond, we recommend $15,000 in E&O insurance.
If you plan to work as a signing agent, we recommend $25,000 in E&O insurance. This is the minimum amount required by most signing services and title companies.
What is the difference between an occurence-based and a claims-made E&O policy?
“Occurrence-based” and “claims-made” are two different types of liability insurance policy structures that determine when coverage is provided and when claims are covered. These terms are often used in the context of various professional liability insurance policies, including Errors and Omissions (E&O) insurance. Here’s the difference between the two:
1. Occurrence-Based Policy: An occurrence-based policy provides coverage for events (or “occurrences”) that happen during the policy period, regardless of when the claim is actually filed. In other words, as long as the event causing the claim occurred while the policy was active, the policy will cover that claim, even if the claim is made after the policy has expired or been canceled.
For example, if a notary public had an occurrence-based E&O policy and performed a notarial act within the policy period that later led to a claim, the policy would respond to the claim even if it was filed after the policy had expired, as long as the event causing the claim occurred during the active policy period.
2. Claims-Made Policy: A claims-made policy provides coverage for claims that are both made and reported during the policy period. This means that the claim must be both filed and reported to the insurance company while the policy is still in force. If a claim arises from an event that occurred prior to the policy’s start date, it will only be covered if the claim is reported during the policy period. Claims reported after the policy expires are not covered.
Using the example of a notary public with a claims-made E&O policy, if the notary performed a notarial act that led to a claim, the claim would only be covered if it was both made and reported to the insurance company during the active policy period. If the notary switched to a different insurer or allowed the policy to lapse without obtaining “tail coverage” (an extension that allows claims to be reported after the policy has expired), the claim might not be covered.
In summary, the key difference between occurrence-based and claims-made policies is when the coverage applies based on when the event causing the claim occurred and when the claim is made or reported. It’s important to understand the type of policy you have and its implications for when you need to report claims to ensure you’re adequately covered.
What is the difference between notary E&O insurance and signing agent E&O insurance?
Notary Errors and Omissions (E&O) insurance and Signing Agent Errors and Omissions insurance are two distinct types of coverage, each tailored to different aspects of the notary and signing agent professions. Here’s the difference between the two:
- Notary Errors and Omissions (E&O) Insurance:
- Coverage Focus: Notary E&O insurance is designed to provide financial protection to notaries public for errors, omissions, or negligence in the performance of their notarial duties.
- Coverage Scope: It covers mistakes related to notarial acts such as verifying identities, confirming signatures, and ensuring the authenticity of documents. It can also cover errors in maintaining proper records and adherence to notarial procedures.
- Applicability: Notary E&O insurance is suitable for traditional notaries who provide a range of notarial services, including witnessing signatures, administering oaths, and certifying copies of documents.
- Use Cases: If a notary fails to follow proper procedures, makes mistakes during notarization, or overlooks important details, this insurance can help cover legal defense costs, settlements, and potential damages resulting from claims.
- Signing Agent Errors and Omissions Insurance:
- Coverage Focus: Signing Agent E&O insurance is tailored specifically to individuals who work as loan signing agents. Loan signing agents are responsible for overseeing the signing of documents during real estate transactions.
- Coverage Scope: It primarily focuses on errors and omissions related to loan signings, including ensuring accurate document execution, verifying identities, and proper handling of loan documents.
- Applicability: Signing Agent E&O insurance is essential for individuals who primarily work in the real estate industry, facilitating the signing of mortgage and loan documents.
- Use Cases: In situations where loan documents are inaccurately signed, notarized, or mishandled during a real estate transaction, this insurance can cover legal defense costs, settlements, and potential damages associated with claims.
In summary, Notary E&O insurance is broad coverage for notarial mistakes and omissions, applicable to various notarial acts. Signing Agent E&O insurance is more specific, tailored to the needs of loan signing agents who handle real estate transaction documents. Both types of insurance are important for their respective roles and can help professionals in these fields mitigate financial risks resulting from errors and legal claims.
HOWEVER, most signing services do not require Signing Agent E&O Insurance. We recommend that you purchasing Signing Agent E&O Insurance only if the signing services specifically requests it.
If you would like to purchase Signing Agent E&O Insurance, you can do so here.