Is There a Difference Between a Bond and Insurance?
Is there a difference between a bond and insurance? Absolutely.
Several years ago, a notary was sued by a customer because the notary forgot to place her notary seal on a document, causing a financial loss to the notary's customer. The notary believed her $10,000 notary bond would cover her court costs and legal fees. It did not.
If a bonding company pays a claim, the notary must pay it back. In essence, the bond acts like a loan that must be repaid by the notary. When a claim is made against a bond, the bonding company pays the Commonwealth first for the loss and then seeks reinbursement from the notary.
Insurance, such as Notary Errors and Omissions Insurance, provides protection for a notary if the notary makes an unintentional mistake that causes a financial loss to a customer. Additionally, E&O Insurance covers defense costs if a notary has to go to court with a claim.
Because Notary E&O Insurance provides primary protection, it pays a claim first before a notary's surety bond and does not need to be paid back to the insurance company. And, there is no deductible.
For more information on Notary E&O Insurance, please visit PAN's Web site at www.notary.org.
Several years ago, a notary was sued by a customer because the notary forgot to place her notary seal on a document, causing a financial loss to the notary's customer. The notary believed her $10,000 notary bond would cover her court costs and legal fees. It did not.
If a bonding company pays a claim, the notary must pay it back. In essence, the bond acts like a loan that must be repaid by the notary. When a claim is made against a bond, the bonding company pays the Commonwealth first for the loss and then seeks reinbursement from the notary.
Insurance, such as Notary Errors and Omissions Insurance, provides protection for a notary if the notary makes an unintentional mistake that causes a financial loss to a customer. Additionally, E&O Insurance covers defense costs if a notary has to go to court with a claim.
Because Notary E&O Insurance provides primary protection, it pays a claim first before a notary's surety bond and does not need to be paid back to the insurance company. And, there is no deductible.
For more information on Notary E&O Insurance, please visit PAN's Web site at www.notary.org.
