IN Notary Errors, Liability, and Notary Insurance 1 — Questions and Answers
Question 1: What is the primary legal protection mechanism Indiana requires for notaries to protect the public?
- Notary errors and omissions insurance
- A surety bond of at least $25,000 (Correct answer)
- Personal liability insurance of at least $100,000
- A cash deposit held by the Secretary of State
Correct answer: A surety bond of at least $25,000
Indiana requires notaries to obtain a surety bond of at least $25,000 as the primary mechanism for protecting the public from notary errors and misconduct.
Indiana Code 33-42-8 requires notary public applicants to obtain a surety bond of at least $25,000. The surety bond is the primary financial protection mechanism Indiana requires to protect members of the public who may suffer harm due to a notary's negligent or wrongful acts. If a notary causes financial harm, an injured party can make a claim against the bond. The bond is issued by a surety company and must be filed with the county recorder before the commission takes effect. This is a minimum requirement — notaries may choose to obtain additional protection through errors and omissions insurance.
Question 2: What is 'errors and omissions' (E&O) insurance for Indiana notaries, and how does it differ from a surety bond?
- They are identical — E&O insurance and a surety bond are different names for the same product
- A surety bond protects the public (the surety pays the injured party), while E&O insurance protects the notary from personal financial losses (Correct answer)
- E&O insurance is required by Indiana law; the surety bond is optional
- A surety bond protects the notary; E&O insurance protects the government
Correct answer: A surety bond protects the public (the surety pays the injured party), while E&O insurance protects the notary from personal financial losses
A surety bond protects the public — the surety pays injured parties and then seeks reimbursement from the notary. E&O insurance protects the notary from personal financial exposure.
These two financial instruments serve different protective purposes. A surety bond primarily protects the public: if a notary causes harm, the surety (bonding company) pays the injured party, and then the surety can seek reimbursement from the notary. The bond is a guarantee of the notary's financial responsibility. Errors and omissions (E&O) insurance, on the other hand, protects the notary personally: if the notary is sued for an error or omission, the E&O insurer defends the notary and pays any resulting judgment or settlement. Indiana requires the bond but does not mandate E&O insurance — it is optional but strongly recommended.
Question 3: An Indiana notary makes a clerical error in the notarial certificate — they write the wrong year in the date. The error is discovered months later. What liability may the notary face?
- None, since clerical errors have no legal consequences
- Civil liability if the error caused actual damages to any party (Correct answer)
- Criminal liability for falsifying records
- Automatic revocation of the commission without any civil liability
Correct answer: Civil liability if the error caused actual damages to any party
A notary who makes a clerical error that causes actual damages to a party may face civil liability for those damages.
An Indiana notary who makes a clerical error — such as writing the wrong year — may face civil liability if that error actually causes financial harm to a party. Not every error automatically results in liability — the injured party must show that the error caused them actual, quantifiable damage. For example, if a document was rejected for recording because of the date error, causing the party to miss a deadline with financial consequences, that could give rise to civil liability. Minor errors that cause no actual harm typically do not result in legal liability, though they may still be subject to disciplinary review by the Secretary of State.
Question 4: Under what circumstances might an Indiana notary face criminal liability in connection with their notarial duties?
- Only when charging more than the maximum fee of $10 per act
- When the notary knowingly performs a false or fraudulent notarial act, such as notarizing without the signer's personal appearance (Correct answer)
- When the notary fails to maintain a complete journal entry
- When the notary misplaces their seal temporarily
Correct answer: When the notary knowingly performs a false or fraudulent notarial act, such as notarizing without the signer's personal appearance
Knowingly performing a false or fraudulent notarial act — such as notarizing without the required personal appearance — can subject a notary to criminal liability.
Indiana notaries may face criminal liability when they knowingly engage in fraudulent notarial acts. Examples include: completing a notarial certificate without the signer's personal appearance (a false certificate); certifying facts the notary knows to be untrue; notarizing a forged signature; or aiding in the preparation of fraudulent documents. These actions may constitute fraud, perjury, forgery, or other crimes under Indiana law (IC 35-44.1-2). The distinction between civil and criminal liability is intent: negligent errors typically give rise to civil liability, while knowing or intentional fraud can result in criminal prosecution.
Question 5: An Indiana notary fails to obtain the required surety bond. What is the consequence for notarizations they perform?
- The notarizations are still valid — the bond requirement is administrative only
- The commission is not legally effective without the bond, meaning notarizations performed without a filed bond may be invalid (Correct answer)
- The only consequence is a fine paid to the Secretary of State
- The notary must repay all fees collected while the bond was missing
Correct answer: The commission is not legally effective without the bond, meaning notarizations performed without a filed bond may be invalid
Without the required surety bond, the Indiana notary commission is not legally effective — notarizations performed without a filed bond may be invalid.
Under Indiana Code 33-42-8, the surety bond is a prerequisite for a valid notary commission. The commission does not take effect until the bond has been properly filed with the county recorder. If a person performs notarial acts before their bond is filed, or if their bond lapses during the commission period, notarizations performed during the unbonded period may be invalid because the person was not properly commissioned. This can have serious consequences for documents that require valid notarizations — such as real property deeds. Notaries must ensure their bond is filed and current throughout the commission period.
Question 6: Which of the following actions would most likely result in disciplinary action or revocation of an Indiana notary's commission?
- Charging the maximum allowed fee of $10 per act
- Maintaining a journal with entries for every act
- Notarizing a document without the signer's personal appearance (Correct answer)
- Performing notarial acts on weekends
Correct answer: Notarizing a document without the signer's personal appearance
Notarizing without the required personal appearance is a fundamental violation of Indiana notary law that can result in commission revocation and other penalties.
Notarizing a document without the required personal appearance of the signer is one of the most serious violations of Indiana notary law. It creates a false notarial certificate by certifying that someone appeared before the notary when they did not. This type of violation — sometimes called 'notarizing in absentia' — can result in the revocation of the notary's commission, civil liability for any resulting damages, and potential criminal prosecution for fraud or falsifying documents. Indiana's Secretary of State has the authority to discipline and revoke commissions for such violations. Charging the maximum fee, keeping a journal, and working on weekends are all proper activities.
IN Notary Errors, Liability, and Notary Insurance 1
What is the primary legal protection mechanism Indiana requires for notaries to protect the public?