AR Notary AR-Notary Notary Bond Requirements and Notary Liability 2 — Questions and Answers
Question 1: A newly commissioned Arkansas notary asks who the surety bond is actually designed to protect. What is the correct answer?
- The public who may be harmed by the notary's misconduct (Correct answer)
- The notary against personal lawsuits
- The notary's employer against business losses
- The surety company against claims
Correct answer: The public who may be harmed by the notary's misconduct
The Arkansas notary bond exists to compensate members of the public harmed by a notary's official misconduct, not to protect the notary.
Question 2: What is the required amount of the surety bond for an Arkansas notary public?
- $7,500 (Correct answer)
- $5,000
- $10,000
- $25,000
Correct answer: $7,500
Arkansas law requires notaries to obtain a $7,500 surety bond (or a qualifying alternative) as a condition of commissioning.
Question 3: Arkansas law permits a notary to satisfy the bonding requirement with an alternative to a traditional surety bond. What is that alternative?
- An errors and omissions insurance policy in the required amount (Correct answer)
- A cash deposit with the county sheriff
- A letter of credit from any bank
- A personal guarantee signed by two witnesses
Correct answer: An errors and omissions insurance policy in the required amount
Arkansas allows a qualifying errors and omissions insurance policy in the statutory amount to be filed in lieu of a surety bond.
Question 4: If a surety company pays a claim of $3,000 caused by a notary's negligent notarization, what may the surety do next?
- Seek reimbursement of the $3,000 from the notary personally (Correct answer)
- Nothing, because the premium covers all losses
- Bill the Secretary of State for the loss
- Collect the amount from the document signer
Correct answer: Seek reimbursement of the $3,000 from the notary personally
A surety that pays a claim on a notary bond has the right to recover the amount paid from the notary through indemnification.
Question 5: A person suffers $20,000 in damages from a notary's misconduct, but the bond only covers part of it. Who is responsible for the amount exceeding the bond?
- The notary, who remains personally liable for all damages (Correct answer)
- No one, because liability is capped at the bond amount
- The Secretary of State's recovery fund
- The county where the notarization occurred
Correct answer: The notary, who remains personally liable for all damages
The bond amount is not a liability cap, so the notary remains personally liable for all damages proximately caused by official misconduct.
Question 6: For how long must an Arkansas notary's bond or qualifying insurance remain in effect?
- For the full ten-year term of the commission (Correct answer)
- For the first year of the commission only
- For five years, then it may lapse
- Only while the notary charges fees
Correct answer: For the full ten-year term of the commission
The bond or qualifying policy must cover the entire ten-year Arkansas notary commission term.
Question 7: Which of the following best describes the difference between a notary bond and errors and omissions insurance purchased voluntarily beyond the requirement?
- The bond protects the public, while E&O insurance protects the notary from personal financial loss (Correct answer)
- Both exist only to protect the notary
- The bond protects the notary, while E&O protects the public
- There is no difference; the terms are interchangeable
Correct answer: The bond protects the public, while E&O insurance protects the notary from personal financial loss
A bond compensates the public and the notary must repay the surety, while voluntary E&O insurance shields the notary's own finances.
AR Notary AR-Notary Notary Bond Requirements and Notary Liability 2
A newly commissioned Arkansas notary asks who the surety bond is actually designed to protect.
What is the correct answer?