A notarial bond is a special type of security taken in relation to movable property, according to Streetsdirectory.com. A general notarial bond gives a creditor preference over unsecured claims in respect of the residue of the insolvent estate. A special notary bond constitutes a form of real security over the assets involved and covered in the bond.
A notary public is an official appointed position by the Secretary of State's office in a given state, as explained by Steetsdirectory.com. As with most public officials, states require that individuals obtain a surety or notary bond prior to receiving their appointment. This bond ensures that if the official violates the public trust through negligence of their duties, funds are available to reimburse the state for its loss. The primary responsibility of a notary public is to validate that the individual parties to a contract are who they claim to be. The state may suffer a loss if the notary fails to properly confirm the identity of the parties.
The notary public is best known as a public official who assists the general public with legal matters of a nonadversarial nature, such as notarizing documents to authenticate their signatures. Notaries also provide a range of other services for which a lack of diligence can result in damages, according to Steetsdirectory.com. These other services include administering oaths and taking sworn testimony or affidavits. Notaries also help with the legal issues relating to business, deeds, estate matters and powers of attorney. It is due to the sensitivity of these other issues that states and local governments require notaries to obtain surety bonds.
According to Ox Bonding, a notarial bond is designed to solve issues through a risk management method. People who need documents notarized are better protected against errors from that notary, including fraud and unethical services. In the event of a notarial error, the bond comes into play, allowing the victim of that error to file for reparations.