NE Notary The Notary Bond 3

Question 1

How does a surety bond differ from Errors & Omissions (E&O) insurance for a notary?

Accepted Answer

A bond protects the public; E&O insurance protects the notary

Answer

A surety bond protects the public from notary misconduct, while E&O insurance protects the notary against claims of honest mistakes.

Question 2

Is E&O insurance required in addition to the surety bond under Nebraska law?

Accepted Answer

No, E&O insurance is optional but recommended

Answer

Nebraska law mandates the surety bond but does not require E&O insurance; however, it is strongly recommended for added protection.

Question 3

A member of the public suffers a $7,000 loss due to a notary's fraudulent act. What is the maximum the bond can pay on this claim?

Accepted Answer

$7,000

Answer

The bond pays the actual proven loss up to its face amount; since $7,000 is below the $10,000 bond limit, the full $7,000 may be paid.

Question 4

After a successful $10,000 claim exhausts a notary's bond, what should the notary do to remain commissioned?

Accepted Answer

Obtain a new bond and file it with the Secretary of State

Answer

If the bond is exhausted or cancelled, the notary must obtain a replacement bond and file it promptly to maintain a valid commission.

Question 5

Which statement best describes the surety company's role in a notary bond?

Accepted Answer

The surety guarantees the notary will perform duties lawfully and compensates harmed parties

Answer

The surety company guarantees the notary's lawful performance and stands ready to compensate members of the public for covered losses.

(NE Notary) Nebraska Notary Exam Practice Test