Notary basics

Notary bond vs E&O insurance

They sound similar and they are often sold together, but they do opposite jobs. One protects the public from you. The other protects you.

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This content is for general information only. It is not insurance advice, a quote, or an offer of coverage. Policy wording controls in all cases. Read the full disclaimer.

A notary bond protects the public

A bond is a promise, backed by a surety company, to pay someone who is harmed by your mistake or misconduct. It is not insurance for you. If the surety pays out, you normally repay the surety. Most states that require a bond set the amount by statute, and you file it before the state will issue your commission.

E&O insurance protects you

Errors and omissions insurance responds when someone claims your professional mistake cost them money. It can pay the claim and it usually pays for your legal defence too. No state requires it, but it is the only one of the two that is actually on your side.

Side by side

	Notary bond	E&O insurance
Who it protects	The public	You
Who pays in the end	You repay the surety	The insurer pays the claim
Is it insurance?	No. It is a financial guarantee	Yes
Is it required?	Required by about 30 states	Optional, unless a contract asks for it
Legal defence costs	Not covered	Usually included
Typical amount	Set by your state	You choose the limit

The part that surprises people

A lot of notaries buy a bond, file it with the state, and assume they are covered. They are not. The bond is there so that a member of the public who is harmed by your mistake has somewhere to recover money from. When the surety pays that person, it has the right to collect the money back from you.

California puts it as plainly as any state: the notary public bond is not an insurance policy for the notary public. Texas says the same thing in its own words, answering the question "is an errors and omissions policy the same as a notary surety bond?" with a flat no.

So the honest summary is this. The bond is a cost of getting commissioned. E&O is the thing you buy if you want protection.

Which do you actually need?

Common questions

Is a notary bond the same as insurance?

No. A notary bond is a financial guarantee, not insurance. It gives the public a source of money if you make a mistake. If the surety pays a claim, you normally have to pay the surety back. Insurance pays the claim and does not come after you for the money.

Do I need both a notary bond and E&O insurance?

In about 30 states you must have a bond before the state will commission you. E&O is not required by any state, but it is the only one of the two that protects you. Many notaries carry both for that reason, and some contracts with title companies and lenders require E&O.

Which one do lenders and title companies ask for?

They usually ask for E&O insurance, and often at a $1,000,000 limit. They are protecting themselves against your mistake, and the bond does not do that.

If my state does not require a bond, do I need anything?

About 21 states do not require a notary bond. In those states there is nothing to file, but you still have no protection of your own. E&O insurance is the policy that covers you if someone claims your mistake cost them money.