NM Notary Notary Bond and Liability 2

Question 1

Is Errors and Omissions (E&O) insurance mandatory for notaries in New Mexico?

Accepted Answer

No, it is recommended but not required by state law

Answer

New Mexico does not mandate E&O insurance for notaries; however, it is strongly recommended as the surety bond does not protect the notary from personal liability.

Question 2

If a New Mexico notary's surety bond is cancelled or lapses, what must the notary do?

Accepted Answer

Immediately cease performing notarial acts

Answer

A valid surety bond is a prerequisite for holding a notary commission; if the bond lapses, the notary must stop performing notarial acts until a new bond is obtained and filed.

Question 3

Which of the following situations would typically NOT be covered by a notary's E&O insurance policy?

Accepted Answer

Intentionally notarizing a document knowing the signer was not present

Answer

E&O insurance covers unintentional errors and omissions; intentional misconduct or fraud is specifically excluded from coverage.

Question 4

What is the legal term for the right of the surety company to recover money paid on a bond claim from the notary who caused the loss?

Accepted Answer

Subrogation

Answer

Subrogation is the surety company's legal right to step into the shoes of the claimant and seek repayment from the notary after paying a bond claim.

Question 5

An employer instructs their notary employee to notarize a document without confirming the signer's identity. If a loss occurs, who may be liable?

Accepted Answer

Potentially both the notary and the employer

Answer

Both the notary and the employer may face liability — the notary for failing to follow proper procedures, and the employer for directing improper conduct.

(NM Notary) New Mexico Notary Exam Practice Test

(NM Notary) New Mexico Notary Exam Practice Test

NM Notary Notary Bond and Liability 2