Notaries in most states are required by law to purchase and maintain a surety bond for their entire term of office. Notary bonds are provided by state-licensed companies called "sureties."
A Notary surety bond provides protection for the public against the Notary's errors, negligence and purposeful wrongdoing. Any person who can prove harm as a result of a Notary's improper actions in performing a notarial act may file a lawsuit to recover against the Notary's bond. If the Notary cannot pay damages to a victim of his or her misconduct, then the surety company will reimburse the victim up to the dollar limit of the bond.
A NOTARY IS OBLIGATED BY LAW TO REPAY TO THE SURETY ANY FUNDS IT HAS PAID OUT ON THE NOTARY'S BEHALF. IN ADDITION, THE NOTARY MUST PAY TO THE VICTIM ANY DAMAGES CLAIMED AND PROVEN BEYOND THOSE REIMBURSED BY THE BOND.
A Notary surety bond is not insurance protection for the Notary -- rather a bond is protection for members of the public who have been financially damaged by the Notary's improper conduct.