AR Notary Notary Liability and Insurance 2 — Questions and Answers
Question 1: In Arkansas, who is primarily protected by a notary's $7,500 surety bond?
- The public who may be harmed by the notary's misconduct (Correct answer)
- The notary personally
- The notary's employer
- The Secretary of State's office
Correct answer: The public who may be harmed by the notary's misconduct
The surety bond exists to compensate members of the public financially harmed by a notary's errors or misconduct, not to protect the notary.
Question 2: If a surety company pays a claim on an Arkansas notary's bond, what may the surety then do?
- Seek full reimbursement from the notary personally (Correct answer)
- Write off the loss with no recourse
- Bill the Secretary of State
- Cancel all other bonds in the state
Correct answer: Seek full reimbursement from the notary personally
The surety has a right of indemnification and can recover from the notary every dollar it pays out on a bond claim.
Question 3: An Arkansas notary notarizes a signature without the signer being present, and a third party suffers a $20,000 loss. Beyond the $7,500 bond, how much of the loss can the notary be personally liable for?
- The entire remaining loss, with no statutory cap (Correct answer)
- Nothing beyond the bond amount
- Only up to another $7,500
- Only court filing fees
Correct answer: The entire remaining loss, with no statutory cap
A notary's personal civil liability is unlimited; the bond amount only caps what the surety pays, not what the notary owes.
Question 4: What is the main purpose of errors and omissions (E&O) insurance for an Arkansas notary?
- To protect the notary from personal financial loss due to unintentional mistakes (Correct answer)
- To satisfy the state's mandatory bonding requirement
- To pay criminal fines imposed on the notary
- To reimburse the surety company automatically
Correct answer: To protect the notary from personal financial loss due to unintentional mistakes
E&O insurance protects the notary personally against claims arising from unintentional errors, unlike the bond which protects the public.
Question 5: Is errors and omissions insurance required for an Arkansas notary commission?
- No, it is optional; only the surety bond is required (Correct answer)
- Yes, a $7,500 E&O policy is mandatory
- Yes, but only for notaries who perform electronic notarizations
- Yes, but only for notaries employed by banks
Correct answer: No, it is optional; only the surety bond is required
Arkansas requires a $7,500 surety bond for commissioning, while E&O insurance is optional protection the notary may choose to buy.
Question 6: An Arkansas notary's employer paid for the notary's bond and supplies. If the notary commits misconduct on the job, who can be held liable?
- Both the notary and potentially the employer, if the act was within the scope of employment (Correct answer)
- Only the employer, since it paid for the commission
- Only the surety company
- No one, because the employer's payment shifts all risk to the state
Correct answer: Both the notary and potentially the employer, if the act was within the scope of employment
The notary always remains personally liable, and an employer may share liability for misconduct directed or occurring within the scope of employment.
Question 7: Which action would most likely expose an Arkansas notary to a claim against their bond?
- Failing to properly identify a signer who turns out to be an impostor (Correct answer)
- Charging less than the maximum allowed fee
- Refusing to notarize an incomplete document
- Keeping a detailed journal of notarial acts
Correct answer: Failing to properly identify a signer who turns out to be an impostor
Failing to verify identity is a breach of official duty that can cause financial harm and trigger a bond claim.
AR Notary Notary Liability and Insurance 2
In Arkansas, who is primarily protected by a notary's $7,500 surety bond?