As a business owner you wear many hats. There is soooo much you need to know. You need to know how to run your business, how to be the Notary, the Signing Agent, the Administrative Assistant, the Advertising Manager, Business Manager, Tech support, Purchasing agent, and the bookkeeper. You also should know what type of insurance you will need to protect all that you do.
As a Notary we are familiar with the Bond that is required of us to purchase in order to receive our commission. That Bond is a type of insurance protection, but it is for the benefit of the public that we serve. Not us. It is there to provide some level of monetary compensation to someone who was harmed by our actions, either intentionally or un-intentionally in connection with our Notarial duties. This is a requirement by our state governing agency but does not really benefit us at all. If someone makes a claim against your Bond, you will be required to pay back those amounts. And, you can be held personally liable for any costs above the amount of your bond. Not to mention your own personal legal fees, court costs and other expenses.
As a Notary and as a Signing Agent working with loan documents we need to purchase E&O or Errors and Omissions Insurance coverage. Working in the General Notary field, it's a really sound idea to have this type of insurance. If you are working with loan documents it is a requirement by most hiring companies to carry a certain level of E&O.
Errors and Omissions insurance is designed to protect Notaries. This type of insurance provides protection from your Notarial errors, unintentionally violating the law, financial damages from a notarization mistake or omission, if you are named in a lawsuit even if you did nothing wrong, notarizations that occur by forging your signature and counterfeiting your seal, and will cover any payout of damages to an injured party after settlement. It should cover all your legal expenses without paying a deductible and in some cases can be used to repay a loss on your bond.
Cyber Crime coverage. This would be for claims made relating to RON or Remote Online Notarizations. While this is still a very new area, the potential for lawsuits related to the security level during a RON signing on NPPI on your computer even if only temporarily is growing. This would the internet and anytime you store provide protection from data breaches and other cybercrimes that may compromise sensitive information along with threats such as malware and hackers. Cybercrime insurance would cover economic damages that arise through a failure of network security or privacy controls which can cause any type of loss.
General Liability coverage. Every business has some type of General liability policy. We need this as well because we are business owners. This would cover everything else we do during the course of business. Think in terms of running over a homeowner's mailbox when you pull up to a signers home. Or somehow leaving a stain on their carpet when you come in. Or knocking over a valuable vase with your briefcase. Or worse, stepping on their tiny dog and causing an injury to the poor little one. It could be something even more costly, like starting a fire when you plugged in your scanner at the table. None of these situations would be covered under your E&O policy and could potentially drain your savings account or even put your home and other assets at risk. If you insurance agent tells you that your homeowners policy should cover you for these things, ask him/her why they don't take your business seriously.....Hmmmm?
Questions you should be asking; When shopping for insurance of any kind, it's never a good idea to just go with the lowest cost. We need to ask some questions to make sure we know what we are buying. What does it cover? What are the policy limits? Sometimes policies are written for a total amount but only 1/4 of it is available per claim with the balance as an aggregate limit for the term of the policy. Ask those questions. Another really important question would be; Is this policy paid out on a Claims-made Basis or an Occurrence-made basis? A Claims-made policy only covers incidents that happen and are reported within the policy's active period. An Occurrence-made policy has lifetime coverage for incidents that occur during a policy period regardless of when the claim is reported. In our business, it could be years before you are presented with a lawsuit for something that you notarized. So for us, it is important to seek out policies that have claims coverage on an Occurrence-made basis.
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