Sarah, a Pennsylvania notary received a telephone call from a loan broker she knew who asked her to notarize loan documents for a couple who wanted to refinance their loan. 

She agreed and met the broker and couple for lunch. Sarah asked for identification from the couple who provided drivers' licenses. She notarized the documents and recorded the transaction in her journal. 

Several months later, the police contacted Sarah and asked to see her journal. They were investigating a case of identity theft. The loan broker and couple she had helped had deceived her. The couple didn't own the property they had refinanced. The three criminals took the loan money and ran. 

In the meantime, the rightful property owners had spent a considerable amount of money and time getting their property rights restored. They sued Sarah alleging negligence in the notarization process, even though she had done nothing wrong. The bank that had made the now-uncollectible loan also filed suit against Sarah. 

Although she was bonded, as required by the notary public law, Sarah did not have Errors and Omissions (E&O) Insurance. A notary bond protects customers in case a notary makes a mistake and must be paid back. E&O coverage insures the notary when a customer suffers a financial loss. It provides financial protection for the notary and does not have to be paid back. 

Sarah had to retain an attorney to defend herself against both lawsuits. She ended up paying thousands of dollars in attorney fees and settling the lawsuits, despite her innocence. It was financially devastating for her. 

Even if you never make a mistake during your notary commission, there is always the possibility that you could be accused of misconduct. 

PAN offers three levels of E&O coverage - $30,000 (for the claim and $15,000 for legal fees), $50,000 (for the claim and $25,000 for legal fees), and $100,000 (to cover both the claim and legal fees). 

For more information on E&O Insurance, call PAN at 1-800-944-8790 Monday-Friday 9 a.m. to 4:30 p.m.