What is E & O insurance, and how does it help a Notary Public?
E & O insurance, or Errors and Omissions insurance, covers a Notary in situations where an unintentional mistake causes injury to a third party. It is a kind of “malpractice” insurance for Notaries. Some of you might already know what E & O insurance is, and think that it does not apply to Notaries because they are bonded – a common misconception. A Notary bond protects the public and is something that must be repaid by the Notary, in the case of a claim. E & O insurance coverage would protect the Notary in the instance of a claim, and the Notary would not be expected to reimburse the insurance company.
What types of mistakes are covered by Errors and Omissions insurance? Inadvertent errors, such as failure to affix your Notarial seal, or to properly identify the signer(s), could subject you to be held liable for any losses. Intentional errors and poor judgment, of course, are not covered. If a claim is made against you, even if it has no validity, you would have the burden of paying court costs etc. in defending yourself, if you did not have E & O coverage. With an E&O policy, you would have no repayment and no minimum or maximum deductible would be required. Also, the attorney fees and court costs are covered, up to your policy limit.
Here are a few examples of the common types of Notary mistakes:
The Notary Stamp is smeared or smudged.
The Notary Stamp covers text or signatures.
The Notary Acknowledgement is worded incorrectly.
Notary stamp missing (yes, it happens).
The Notary’s commission number missing.
If a Notary Public is performing loan signing services, there is even more room for error, such as:
Incorrect Notice of Right to Cancel dates.
Documents are missing signer’s initials.
Mistakes on the document(s) are corrected using white-out.
Notary did not correctly following closing instructions.
Loan Documents not returned in a timely manner.
Notary acknowledgement not completed, or completed improperly.
Notaries accepting personal checks over $500 (or over the amount allowed by State law).
Checks made out to the wrong company.
In Florida, a Notary Public is not required to have E & O coverage, but this insurance protects you against mistakes that can happen with any notarization. It only takes one mistake to potentially lose all of your hard earned money, and possibly even your business!
Errors and Omissions insurance rates vary according to the State in which you are a Notary, and the amount of coverage you choose. In some States minimal coverage starts out at less than $10.00 per year with maximum coverage at $200.00 per year.
The Rates in Florida for Individual policies range from $30 to $75 depending on policy limit chosen, and slightly more for group rates. Keep in mind that if you are an employer, you would want to look into a group policy because the individual policy would only cover the employee/notary and not the business. All in all, these costs are truly minimal, considering the consequences should there be a claim.