7.3 Errors and Omissions (E&O) Insurance

Notary Public Certification Exam

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1 Introduction: The Notary Public Profession

What Is a Notary Public? Becoming a Notary Public: Requirements Overview

2 Chapter 1: Notarial Acts — Fundamentals

1.1 Overview of Notarial Acts 1.2 Acknowledgments 1.3 Jurats (Verification on Oath or Affirmation) 1.4 Oaths and Affirmations

3 Chapter 2: Notarial Acts — Advanced Types

2.1 Copy Certifications 2.2 Signature Witnessing 2.3 Protests of Negotiable Instruments 2.4 Depositions and Affidavits

4 Chapter 3: Signer Identification & Verification

3.1 Satisfactory Evidence of Identity 3.2 Handling Name Discrepancies 3.3 Assessing Willingness and Awareness

5 Chapter 4: Journal Keeping & Record Requirements

4.1 Notary Journal Requirements 4.2 Electronic Journals 4.3 Record Retention and Disposal

6 Chapter 5: Notary Seal & Certificate Requirements

5.1 Notary Seal and Stamp Specifications 5.2 Notarial Certificates and Wording

7 Chapter 6: Prohibited Acts & Ethical Obligations

6.1 Unauthorized Practice of Law (UPL) 6.2 Conflicts of Interest and Impartiality 6.3 When and How to Refuse Notarizations

8 Chapter 7: Fees, Bonds & Insurance

7.1 Notary Fee Schedules 7.2 Surety Bonds 7.3 Errors and Omissions (E&O) Insurance

9 Chapter 8: Remote Online Notarization (RON)

8.1 RON Fundamentals and History 8.2 RON Identity Verification Methods 8.3 RON Procedures, Recording, and State Compliance

10 Chapter 9: Special Situations & Accommodations

9.1 Foreign Language Signers 9.2 Signers with Disabilities 9.3 Elderly Signers and Diminished Capacity 9.4 Power of Attorney and Representative Signers

11 Chapter 10: Notary Signing Agent (NSA) Specialty

10.1 What Is a Notary Signing Agent? 10.2 Key Loan Documents

12 Chapter 11: State Variations & Compliance

11.1 Key State Variations Overview 11.2 Apostilles and Authentication 11.3 Commission Changes, Renewal, and Revocation

13 Chapter 12: Liability, Penalties & Best Practices

12.1 Notary Liability and Legal Consequences 12.2 Notary Best Practices Checklist 12.3 Exam Preparation Strategies

7.3 Errors and Omissions (E&O) Insurance

Key Takeaways Explain This Topic AI

Errors and omissions (E&O) insurance protects the NOTARY from financial liability for honest, unintentional mistakes

E&O is separate from and complementary to the surety bond; together they cover both the public and the notary

Most states do not require E&O insurance, but it is strongly recommended for active, mobile, and signing-agent notaries

E&O policies typically pay legal defense costs, settlements, and judgments arising from negligent notarial errors

E&O does NOT cover intentional misconduct, fraud, forgery, criminal acts, or unauthorized practice of law
Last updated: June 2026

What E&O Insurance Is

Errors and omissions (E&O) insurance is a professional-liability policy a notary buys to protect themselves from financial loss when an honest, unintentional mistake during a notarization leads to a claim or lawsuit. It is the mirror image of the surety bond: the bond protects the public and the notary repays it; E&O protects the notary and requires no repayment .

What E&O Covers

Coverage Example
Legal defense costs Attorney fees when you are sued over a notarial error — even a meritless suit
Settlements Money paid to resolve a claim out of court
Court judgments Damages a court orders you to pay
Procedural errors Completing the wrong certificate, transposing a date, misreading an ID
Omissions Forgetting a required step, such as failing to administer the oath on a jurat

A central selling point is defense coverage : even when a notary did nothing wrong, defending a lawsuit is expensive, and E&O pays those costs. The bond would not respond here because no public harm occurred.

What E&O Does NOT Cover

E&O is for mistakes , never for bad acts . Coverage evaporates the moment intent or illegality enters.

Exclusion Why It Is Excluded
Intentional misconduct Knowingly notarizing a forgery, backdating, or notarizing without the signer present
Fraud and forgery Active participation in deceit is not an "error"
Criminal acts Any illegal activity by the notary
Unauthorized practice of law (UPL) Giving legal advice or drafting documents without a license
Knowing false certifications Certifying facts the notary knows are untrue
Pre-existing claims Claims that arose before the policy's effective date
How Bond and E&O Work Together

Scenario Bond Responds? E&O Responds?

Notary misidentifies a signer using a convincing fake ID Yes (public harmed) Yes (honest error — defense/settlement)

Notary knowingly joins a fraud scheme Yes (public harmed) No (intentional misconduct)
Notary completes the wrong certificate type by mistake Possibly Yes (honest error)
Notary is sued but did nothing wrong No (no public harm) Yes (legal defense costs)

Together they form complete protection: the bond pays the public, the E&O defends and indemnifies the notary — but only for negligence, not for intent.

Who Needs It, Cost, and Limits

Though optional in most states, E&O is strongly recommended for notaries with real exposure:

Notary Signing Agents (NSAs) — they handle six-figure loan packages where a single missed acknowledgment can derail a closing.

Mobile notaries — high volume in varied settings raises the odds of an error.

High-volume / commercial notaries — more transactions, more chances for a mistake.

Any notary wanting peace of mind — one defense bill can exceed years of fees.

Typical Pricing

Item Typical Range
Annual premium ~$30 to $100 per year
Coverage limit $25,000 to $100,000+ per occurrence
Common providers National Notary Association, American Society of Notaries, private carriers

Higher coverage (e.g., $100,000) is common for signing agents because lenders and signing services often require it. Coverage is per-occurrence up to the policy limit, distinct from the aggregate structure of a surety bond.

Exam Focus

E&O protects the NOTARY ; the bond protects the PUBLIC .

E&O covers honest mistakes/negligence , never intentional misconduct, fraud, or UPL .

E&O is optional in most states but highly recommended for active notaries.

E&O and the bond are separate and complementary — a claim can trigger both, one, or neither.

E&O uniquely pays legal defense costs even when the notary is ultimately not liable.

Worked Coverage Example

A signing agent completes a refinance package and, in haste, attaches an acknowledgment certificate where the document called for a jurat (which requires an oath). The title company catches the error after recording, the closing is delayed, and the borrower claims $4,000 in lost-rate-lock damages.

This is an honest procedural error , not intentional misconduct, so the notary's E&O policy responds : it pays the $4,000 settlement and the attorney fees to negotiate it, up to the policy limit (say, $100,000).

The surety bond could also respond because a member of the public was harmed — but if it paid, the notary would have to reimburse it. The notary therefore routes the claim through E&O, which requires no repayment.

Now change one fact: the notary knowingly attached the wrong certificate to rush a friend's deal. That is intentional, so E&O denies the claim entirely, and the notary bears the full loss personally (and faces commission discipline).

Common E&O Traps on the Exam

"E&O is required like the bond" — false ; it is optional in most states.

"E&O covers fraud" — false ; intentional and criminal acts are excluded.

"E&O protects the public" — false ; that is the bond's job.

"E&O only pays if the notary is found liable" — false ; it pays defense costs even for meritless claims.

The through-line for the whole chapter: fees are capped per act, the bond fronts money to the public and is repaid by the notary, and E&O absorbs the notary's own honest mistakes without repayment — three distinct mechanisms the exam expects you to keep straight.