Item #120 - Errors and Omissions Insurance

What is Errors and Omissions Insurance and why would you want it?

For larger coverage amounts, scroll down the page.
The state of California requires every notary to carry a $15,000 notary bond. Many notaries think that's
enough to cover any mistakes they make. However, the notary bond exists only to pay the public. As a notary,
if you make a mistake and a court finds against you, are personally responsible for the damages awarded.
The bond will chip in the first $15,000 of the damages to cover the loss for this amount. However, the
bonding company will then ask you for the money. If you don't have it, the bonding company will attach your
wages and anything you own to secure repayment.

Errors and Omissions insurance covers you. If you are found at fault and required to pay damages, E&O will
your expense. $15,000 E&O will cover the bonding company. There is also another advantage to E&O. If you
are sued, the E&O company is potentially at risk, therefore, they have more of an incentive to protect you.
If the fault in the lawsuit is not clearly yours, the E&O company will usually provide help with your
defense in order to protect their money.

Do you really need E&O? Every notary has some amount of risk. However, if you are notarizing only for your
employer, your employer may already have you covered. If you are doing a low volume of notary work, it may
not be worthwhile to pay for E&O. However, if you are notarizing for the general public, doing a large
volume of work, or are in a distracting environment, it would probably be best to get coverage.

$15,000 E&O Insurance for 4 years = $50.00

Would you like more E&O coverage?

$30,000 E&O coverage is a step up from basic E&O coverage. If you're a bit more cautious or are in a public
environment where it is easy to be distracted, $30,000 E&O coverage may make more sense. This gives the
insurance (bond) company more incentive to fight for your rights. It also may cover attorney fees if a
lawsuit is filed against you. Even if you are not at fault, you may still need to cover legal fees. This
E&O policy will cover a great deal of expense.

$30,000 E&O Insurance for 4 years = $80.00

$100,000 E&O Coverage - Required by Many Companies for Signing Agents

$100,000 E&O coverage is the maximum amount of E&O coverage allowed by most bonding companies. The price
covers the full four years of your notary term. Many loan signing companies require this high amount of
Errors and Omissions insurance. The reason for this high amount is that the potential liability from a
mistake on a real estate closing package is higher than normal. If you are planning to do loan closings
as a signing agent, $100,000 E&O coverage will help you to get noticed by the companies that you contact.

$100,000 E&O Insurance for 4 years = $170.00