Posted by Robert/FL on 4/1/10 11:22am
Msg #329945

Thinking about E&O...

When you think about Errors & Ommissions Insurance, it really does not cover a whole lot. At least my policy, which is only $1,000, will only cover unintentional errors within a notarial certificate. You think, how much damage can an error in a notarial certificate really cause? I tend to be so meticulous with notarizations, that if I were to make an error - and I can think of at least two that I've made - it would be so minor that it could the error itself could not possibly cause a substantial loss to the signer where they would be eligible to file a claim against my E&O. Perhaps I can see where a mortgage gets dismissed because of some major error in the notarial certificate, but even a wrong date, misspelled name, etc., could not possibly be the direct cause of a high monetary loss.

Like I said above, my policy is only $1,000, but I can not think of any mistake I could possibly make that would cause a loss of $1,000. Am I just looking too much into this, or is E&O just a bunch of hype when you think about it?

Reply by Prosperity on 4/1/10 11:34am
Msg #329947

Interesting. I didn't even know there was such a thing as $1,000 E & O. Are you doing mortgages (purchases, refinances, etc)? I think the more a mistake can potentially cost, the more E&O you need to have. I'm not prepared to lose my home for a mistake. I am also very careful with my notarizations, but better safe than sorry.

Reply by Julie/MI on 4/1/10 11:43am
Msg #329949

Don't know about fl laws, but notary error does not invalidate a document in my state so only have the free $10,000 that comes with my bond.

Reply by Robert/FL on 4/1/10 12:04pm
Msg #329952

I think that E&O will only pick up costs resulting from an error within a notarial certificate. My question is, what type of error could you possibly make that would cause you to spend $10,000 defending yourself? Maybe for those notaries who notarize a hundred documents a day and don't really read what they are signing, but those are the type of notaries that wouldn't care to get E&O anyway.

No, I don't do loan signings, but even if I did, I would think that if I were to make an error in a loan signing it would be an error in my explanation of a document to a borrower, not a notarial error. Thus, my E&O would not cover it. If the mortgage were to get thrown out by a court, I doubt that it would be the result of a notarial error on my part.

It just doesn't make sense to me... in Fla. we have a required $7500 notary bond, and mine came with a $1,000 E&O policy. I have high doubts that I will ever have to use my E&O.

Reply by kathy/ca on 4/1/10 12:15pm
Msg #329955

I may be wasting money but I carry 100k even though I too

cant imagine making an error on my notary certificates, I want as much protection as possible should something unexpected or out of the norm happens.

Reply by desktopfull on 4/1/10 9:13pm
Msg #330044

Okay I can't ignore this anymore.

"Maybe for those notaries who notarize a hundred documents a day and don't really read what they are signing, but those are the type of notaries that wouldn't care to get E&O anyway. "

Please indicate which Florida statute that requires a notary to read the document that they are attaching notarial certificate to, plus we aren't the ones signing the document otherwise we wouldn't be able to attach a notarial certificate. When did a notary become responsible for the contents of any document that they are attaching a notarial certificate to? We just scan the document to make sure that all the blanks are filled in, that's all. Furthermore when did we start notarizing documents instead of signatures?

"No, I don't do loan signings, but even if I did, I would think that if I were to make an error in a loan signing it would be an error in my explanation of a document to a borrower, not a notarial error. "

Your explanation of any document in a loan package would be considered UPL. The only question your allowed to answer for a borrower is "where". And the bond is required in case you do something like reading and interpreting documents, or break the law.

"It just doesn't make sense to me... in Fla. we have a required $7500 notary bond..."

The bond company will pay up to the $7500.00 in fines or whatever and then come after you to reimburse them. If you don't reimburse them you will never get another bond and depending on what you did you may not anyway.

You have demonstrated that you aren't the expert notary that you would like everyone to believe you are and you could learn a lot from this forum and the notaries that post here.

Reply by Sylvia_FL on 4/1/10 9:26pm
Msg #330046

Well said DTF

In all my years as a notary I have only notarized signatures and not documents.
And I don't read the document the person is signing. I do scan over it to make sure it is complete, no blank spaces. But the contents of a document are not our concern.

Reply by Robert/FL on 4/1/10 11:05pm
Msg #330056

>>> Please indicate which Florida statute that requires a notary to read the document that they are attaching notarial certificate to

I meant notaries that don't read the pre-printed *notarial certificates*

>>> our explanation of any document in a loan package would be considered UPL.

This is only what I've been saying since I joined this board! And yet 80% of the members here are signing agents whose JOB is to EXPLAIN documents. You can say, "Oh, we don't explain, we just point out which documents mean what." That is explaining documents. Call it what you want. I don't do loan signings, never have and never will. If anyone is engaging in UPL, it is you signing agents, not those like me who are just notaries.

Reply by desktopfull on 4/1/10 11:57pm
Msg #330064

What you may have meant and what you wrote were two totally different things.

You definitely have absolutely no understanding at all of the NSA's services and due to that fact you are making ridiculous statements. We do not engage in UPL as you have indicated. However, your constant repudiation of NSA's is really getting old.

Reply by PAW on 4/2/10 7:40am
Msg #330078

FL definition of UPL

UPL is a product of Florida Supreme Court case law. A broad, general definition and a three­part test were outlined in the State of Florida v. Sperry, 140 So. 2d 587 (Fla. 1962).

"We think that in determining whether the giving of advice and counsel and the performance of services in legal matters for compensation constitute the practice of law it is safe to follow the rule that if the giving of such advice and performance of such services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the persons giving such advice possess legal skill and knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitute the practice of law." (Ref: FL Bar Issue Papers - Unlicensed Practice of Law - http://tinyurl.com/ydu593a)

Explaining things that NSA's should know about the mortgage and process, does not fall into the definition of UPL. Granted, if someone offered advice and counsel to a question such as, "What would happen to me if I failed to make my mortgage payment?" that may be considered UPL as the NSA would be offering a legal opinion and advice. However, answering a question like, "What does APR mean and how is it derived?" would not be UPL since the definition and derivation of APR is common knowledge in the mortgage and lending industry. A competent NSA should know those types of things. If they don't know them, then the NSA should refer to the borrowers to competent authority, such as their LO or broker.

Most other states have also defined UPL in a similar and often more specific manner. For example, Virgina State Bar's explanation of "The Definition of the Practice of Law in the Commonwealth of Virginia", Part 6, §I (B): http://www.vsb.org/site/regulation/upl-opinion-214

Reply by MistarellaFL on 4/2/10 8:17am
Msg #330080

Thank You PAUL!

The voice of reason!
Here is a very recent Florida Bar article on UPL, in regards to exactly what WE do.

https://www.floridabar.org/__85256aa9005b9f25.nsf/0/78e845ddd911251c852576ce00674874!OpenDocument&Click=

Reply by MistarellaFL on 4/2/10 8:20am
Msg #330081

Don't know why this didn't hyperlink

https://www.floridabar.org/__85256aa9005b9f25.nsf/0/78e845ddd911251c852576ce00674874!OpenDocument&Click=

But it is the correct address. Copy and paste to read, I guess.

Reply by Sylvia_FL on 4/2/10 8:31am
Msg #330083

Click on this link

Try this:

http://tinyurl.com/yhvgty8

Reply by jba/fl on 4/2/10 8:33am
Msg #330085

Sometimes you just have to use tiny url

http://tinyurl.com/

Something must be wrong with what you posted - I couldn't get it to work. It only took me as far as The Florida Bar.

Reply by jba/fl on 4/2/10 8:30am
Msg #330082

Re: FL definition of UPL

Of course, if someone did ask me: ""What would happen to me if I failed to make my mortgage payment?" I can point to the passage in the mortgage that states the answer, and refer them also to appropriate persons who can answer that question specifically.

My function includes pointing where the information is contained in the document package.

Reply by SharonMN on 4/1/10 12:00pm
Msg #329951

An interesting thing to remember is that someone doesn't need to be right to sue you and cost you a lot of money.

I believe most E&O would pay up to the limits of your policy if, for example, Bob sued you because an imposter (Joe) presented a fake ID as Bob and you notarized Joe's signature as Bob. In this case, you did no wrong as long as you believed it to be a real ID, but you'd still have to pay for a lawyer to defend yourself, which hopefully your E&O would cover.

Reply by Roger_OH on 4/1/10 12:08pm
Msg #329953

Ask the notary who was personally nailed for $30,000...

in the FedEx/Kinko's case (Vancura v. Katris, December 2008) that resulted in a six-figure judgement against the company, and is the reason they no longer offer notary services at their stores. Don't know how much E&O he had (if any), but $1000 wouldn't have helped much.

Reply by Robert/FL on 4/1/10 12:17pm
Msg #329956

But in that case, the notary intentionally violated the law

by not requiring personal appearance, if I'm not mistaken. E&O would not cover something like that IMO.

Reply by Riley/FL on 4/1/10 12:20pm
Msg #329958

Re: But in that case, the notary intentionally violated the law

I have E&O mainly because most, if not all, TCs and SS require it to be a vendor. I carry $50K because they seem to like that number. It costs $30 a year.

Reply by BobbiCT on 4/1/10 12:19pm
Msg #329957

Re: FedEx Kinko's case ...

The notary wasn't "nailed". He settled his portion of the suit for the $30k E&O coverage that he had ... and then became the key witness for the Plaintiff!

In this case, THE NOTARY was to blame (blatent laspses that No notary taking reasonable care would do); however, Kinko's got the Larger Financial hit for 1) its employee "notary" training and 2) having an on-site employee perform notarizations as part of Kinko's business.

I read the case, appeal and dissenting Judge's opinion.

Reply by kathy/ca on 4/1/10 12:29pm
Msg #329959

What were the "blatent lapses" in this case Bobbi? n/m

Reply by Robert/FL on 4/1/10 12:35pm
Msg #329960

The "blatent lapses" include...

- the notary's failure to require the personal appearance of the signer
- the notary's failure to maintain a proper journal
- the notary's acceptance of identification which did not contain a photograph

Reply by Robert/FL on 4/1/10 12:36pm
Msg #329961

and I don't think E&O would cover any of those incidents n/m

Reply by Roger_OH on 4/1/10 12:43pm
Msg #329963

But as Bobbi noted - despite lapses, E&O DID cover him! n/m

Reply by kathy/ca on 4/1/10 12:49pm
Msg #329964

I am curious as to how much coverage most notaries carry. I

have carried 100k since I became a notary years ago. Maybe its overkill and yes it costs considerably more than 50k but when you consider what possible consequences could occur, I think it is worth it.

Reply by Marian_in_CA on 4/1/10 1:12pm
Msg #329968

BUT -- they could choose to if...

it is in the best interest of the insurance company to settle. It happens all the time.

Many years ago, my brother was in a bad car accident with both of my sisters. My brother ond one of my sisters had major injuries, fractures, you name it. We're talking about a 17 yo boy, a 12 year girls and a 9 year old girl here -- all kids, two of them so hurt they required tutors at home for months. Lets add on top of that that our father was dying of cancer at the same time. In fact, the day of the accident, Dad had just come home from the hospital after having half of his jaw removed. So, needless to say... it was a bad day.

The insurance company, at first, said they'd only pay out to the policy limits, which wouldn't even cover the care for one of them. You can just imagine how our health insurance company responded.

The two insurance companies ended up fighting over the bills, and when it looked like they were going to dump in on our family... about a month after Dad died, my mom hired a lawyer who basically sat them both down and said, "You are going to do this to a brand new widow who is about to lose her home to foreclosure, with 5 kids under the age of 20? You two companies are both heartless bastards and I'll make sure this gets on the news."

It was settled that same day. Both companies ended up splitting the costs because it was less damage than the potential negative publicity the story would have caused.

Same goes for this situation... many times, it's easier just to pay, despite outside of the policy limits. If forced to go to court on the matter, it could cost more.

Reply by Dennis D Broadbooks on 4/1/10 2:07pm
Msg #329979

Marian...

...just to clarify. You're not saying the insurance companies paid out MORE than the policy limits in this situation, are you?

Reply by Linda_H/FL on 4/1/10 2:11pm
Msg #329981

Re: Marian...

Sounds odd to me too Dennis - I'm thinking there was some other coverage there (uninsured/underinsured limits) together with the medical providers compromising their bills to facilitate the settlement.

Reply by Dennis D Broadbooks on 4/1/10 2:14pm
Msg #329982

There Remains Policy Limits to be Reckoned With...

...it doesn't make sense they'd pay out more than what was legally contracted for under their policy.

Reply by Marian_in_CA on 4/1/10 2:27pm
Msg #329986

Re: There Remains Policy Limits to be Reckoned With...

I believe the extra was considered "additional compensation" rather than actual coverage. I was 19... I don't remember it all. I just know that the auto insurer was trying to pull a fast one to avoid paying at all, and had we gone to court, the lawyer was going to seek compensatory damages in addition to the policy limits. We had a pretty solid case, with documentation... so they came to an agreement to avoid court and paid the extra medical bills.

We never saw any of the money anyway. It all went to the hospital and medical bills.

Reply by Marian_in_CA on 4/1/10 2:18pm
Msg #329983

Re: Marian...

They did... sort of. There were a lot of complicated factors involving claims limits during the time period (my father's cancer treatments) and a dispute about the auto insurance policy itself regarding policy changes. For example, the auto policy was not wanting to pay a dime because my brother, a minor, had other minors in the vehicle with him -- which was NOT part of our policy, but they claim it was.

Eventually, the auto policy paid about $15K over the policy limits as a settlement to stay out of court and avoid publicity. Health insurance paid the rest. So yeah... they did pay more.

Reply by Marian_in_CA on 4/1/10 2:23pm
Msg #329984

Re: Marian...

Let me add... that in our case, we would have gone to court because the auto insurance company was trying to avoid paying out altogether, even though we had documentation in our favor. They claim to have added limitations to the policy, but my parents never would have agreed to those limits. Not with 5 kids!

What I was trying to get at is that sometimes, insurance companies will act and pay despite the terms or exclusions in a policy just to make it go away, especially if fighting it would mean a costly or public legal situation.

In the Kinko's case... the E&O insurance probably did the smart thing. Pay it, make it go away, even if it wasn't exactly covered by the policy.

Reply by Linda_H/FL on 4/1/10 2:31pm
Msg #329989

Re: Marian...

"What I was trying to get at is that sometimes, insurance companies will act and pay despite the terms or exclusions in a policy just to make it go away, especially if fighting it would mean a costly or public legal situation."

Called "nuisance value"...

Reply by Dennis D Broadbooks on 4/1/10 2:33pm
Msg #329991

I'd Have to Know a Lot More of the Particulars...

...before I'd make any more comments.

Reply by Marian_in_CA on 4/1/10 2:52pm
Msg #329995

Re: I'd Have to Know a Lot More of the Particulars...

Yeah... I don't know all the details, wish I did. I'd have to ask my Mom.

All I know is that we were going to court... but they settled and the bills were paid. What I said here is about all I remember of it. Though remember I was a 19 year old kid who had just lost her father, so take it for what it's worth.

Like I said though, the point is really that sometimes companies can and do pay even if they don't feel legally obligated to do so in order to avoid a worse situation.

Reply by Dennis D Broadbooks on 4/1/10 2:03pm
Msg #329978

Those Described "Incidents"...

...unless proved to be intentional, are EXACTLY why any E&O policy exists! It's designed to cover an unintentional "error" or "omission" within the coverage scope of the insurance policy.

Reply by kathy/ca on 4/1/10 12:42pm
Msg #329962

Oh wow Big, Big errors! n/m

Reply by Laura_V on 4/2/10 9:52am
Msg #330094

You are SO right, Roger!

I posted (below) that I think E&O coverage for 10 times our assets is about right, at least for me.

I should have clarified (sorry, tired last night).

I meant umbrella malpractice insurance in addition to the specific notary insurance.


Ex of what I saw happen IRL

I notarize some court docs for a little old lady who had a nice younger roommate.

Little old lady (Ltl) finally left wife abuser of many several decades. Too scared to leave before but when grown only child died (accident or war, I think), she just didn't feel like living any more so getting killed by leaving prev mentioned jerk was low risk. Restraining orders, etc.

Jerk finally gets a clue and leaves ex alone and starts consorting with younger clever gal down the street from the family house. This goes on for around a year. Then jerk dies.

Wife assumes she doesn't have to go through probate. Wrong. Roommate giving her bad advice about what to say in court. I told roommate I didn't know if her advice was wrong or not (true but I've seen bad things happen when ppl assume things and I've been in court a couple of times) but she should totally cut it out. Nope.


So darling little wife loses virtually everything and hussy down the street got the family house. Wife super broke.



Now if I had given advice (UPL) obviously or notarized one of wifey's docs incorrectly and roommate irrationally blamed me, I could have had my pants sued off. I carried $100K in Notary E&O Insurance at the time. That would not have covered the UPL part. Umbrella / general business E&O would have.

$100K in Notary E&O Insurance ins and $100K in umbrella e&o would have looked like VERY deep pockets to those two broke women.


I know ppl will beat me up for abbreviating, etc. But I slept 7 hours straight last night and woke up tired and happy. Then laid in bed listening to Canadian public radio for 1+ hours then got up to build fire and see what's up at NR. Taking out pug for walkies is next.

And I'm a slow typist so abbreviating, using slang, etc is VERY much a time saver for me. Plus it is easier and more fun.



But this point about how much our VERY hard earned assets are on the line every time we notarize anything doesn't seem to be getting read or heard in Notaryland. Almost all of us need more insurance.

We really need to take care of ourselves and our families. Please.

Reply by Marian_in_CA on 4/1/10 12:54pm
Msg #329965

I think of it as a legal fund...

I, too, am really careful about what I do, but that doesn't stop me from being sued if something does happen, or being tacked on to a suit just because my name is in a bunch of paperwork. In those cases, you still need legal representation to defend yourself, and insurance pays for that, too.

However, Notary E&O Insurance is just one part of an overall insurance approach. We should all have general business liability insurance, too -- and an umbrella policy if you have a lot at risk. Business insurance is cheap... there's no reason not to have it.

Reply by Robert/FL on 4/1/10 1:06pm
Msg #329967

Re: I think of it as a legal fund...

Luckily for me, I have two attorneys at my disposal and actually know enough to act as my own attorney pro se if need be. But since I don't do loan signings, is there really any reason for me to have E&O at all? When I renew my commission in 2012 I was considering renewing with a bonding agency that gives you $5,000 E&O as part of their package, but now I am starting to reconsider if it is really necessary.

Reply by Marian_in_CA on 4/1/10 1:15pm
Msg #329969

Re: I think of it as a legal fund...

Each situation is different, obviously. In CA, we are required to carry a $15K bond anyway, so it only makes sense to have enough E&O or business insurance to not only cover the bond but also potential legal costs.

If I am ever rich enough that I can bank that kind of money, then I'll likely dispense with insurance, too... but I'm nowhere near that, likely never will be.

Reply by kathy/ca on 4/1/10 1:32pm
Msg #329973

Just because you dont do loans, what about a POA that is

signed by an elderly person to appoint a child in charge of their estate and care that is challenged by an angry sibling etc, I see no difference between doing loans and general notary work as far as being covered.

Reply by Linda_H/FL on 4/1/10 1:37pm
Msg #329974

But if the notarization is correct there's no liability

on the part of the notary - absent notary error you can't hold a notary responsible for sibling rivalry..

Reply by kathy/ca on 4/1/10 1:46pm
Msg #329976

I know but in a law suit anyone can be called on and even if

a notary is in the right there could always be legal expenses. I probably overthink this issue way too much because I would hate to take the chance of losing what I have worked so hard to have in life as I am sure you all have.

Reply by Marian_in_CA on 4/1/10 2:30pm
Msg #329987

If you think about it, though....

How many notaries out there think they're doing everything right... when in fact, they're about as dumb as a rock.

I'll use the example of the court paperwork I posted the other day about the name change. The notary in that case completely screwed up, was using non-compliant wording for California. I'm sure she thought she was doing everything right.

Reply by kathy/ca on 4/1/10 1:42pm
Msg #329975

Marian, it is not cheap as far as I'm concerned its $1,000 a

year plus $150 for E&0 and when I was doing more loans than I could handle that was cheap but now thats things have slowed to a trickle in the loan business, that seems like a lot to spend on insurance. BUT, of course if something unforseen should happen and I needed it I would probably think $1,150 a year was a bargain for insurance!

Reply by Laura_V on 4/2/10 10:03am
Msg #330098

ITA Kathy! I'm so glad you understand what I mean when I st

state that I think if the ins companies caught onto how much liability we notaries face daily, only rich ppl could be notaries because only they could afford the insurance.

My assets are starting to really grow so I am looking at incorporating my little businesses under an "umbrella" Inc or LLC or Holdings LTD. Whichever gives me more protection.

And I need to research if getting E&O and other ins for the corp will cover the all the little businesses or not.


I love doing notary work. I'll hate having to give it up if that seems essential.


Super thanks for the refreshing post, Kathy!

Reply by BrendaTx on 4/1/10 1:18pm
Msg #329972

I believe it is important and I cite

the remarks by Marian and Bobbi below. In a hurry now...might expound later.

Reply by Sylvia_FL on 4/1/10 2:24pm
Msg #329985

Re: I believe it is important and I cite

I totally agree Brenda. It's sort of like auto insurance (or any other kind of insurance) you hope you won't ever need it, but it is good to have. I have always carried E&O insurance, I have never needed to use it, but I am glad it is there. I am not so arrogant that I would believe I could never make a mistake.

Reply by JAM/CA on 4/1/10 2:31pm
Msg #329988

North American Title is now requesting $500,000.

New policy. All notaries doing loan signings must carry $500,000.00 E & O insurance. Yes, it is E & O that they want. Signing Services must carry $1,000,000.00.

This runs about $792.00 a year. Some companies will give you 9 months to pay at 9% interest. The Title company does provide you with a list of suppliers who cover the $500,000.

Reply by Roger_OH on 4/1/10 2:34pm
Msg #329992

They'd have to give me a TON of volume for that! n/m

Reply by Notarysigner on 4/1/10 3:29pm
Msg #330005

Re: North American Title is now requesting $500,000.

When SS are losing court cases for stupid court actions and Notaries are winning, I'm not surprised they would require that to protect themselves. IMO

Reply by Sylvia_FL on 4/1/10 5:43pm
Msg #330019

Re: North American Title is now requesting $500,000.

"I'm not surprised they would require that to protect themselves"

However the E&O notary insurance only covers the notary.

Reply by JanetK_CA on 4/2/10 12:52am
Msg #330069

Wow! Think of how many signings just to break even! n/m

Reply by MW/VA on 4/1/10 3:29pm
Msg #330006

The need for E&O insurance was marketing heavily by XYZ.

IMO, like most insurance, we take it based on a "fear factor". The "what if someone sues me" scenario. Also, because of XYZ again, many companies started requiring a minimum of $100K for signing agents. Since E&O only covers "unintentional" errors, it does not cover us in a signing agent capacity. I do carry $100K, as well as a $500K business liability policy. As with any insurance, I'm insuring myself against the loss of my property in the event someone decides to sue me. It's not likely, but that's what insurance is about--weighing the risks.
Some requirements for $500K E&O have surfaced recently--like from Provident Loans. I'm not even interested in trying to obtain that amount. I have a business to insure, and I'm not going to help to insure the lenders, tc's, or ss'. My .02 on the matter.

Reply by Laura_V on 4/1/10 11:38pm
Msg #330060

I think having E&O covering around 10 times my assets is abo

I think having E&O covering around 10 times my assets is about right.

I'm gathering info to incorporate all my businesses as a "holdings" corp to add asset protection so my malpractice ins costs will be lower.


As I mentioned in a reply to Marian CA's stunning essay a couple of months ago, if the ins companies caught on to how much liability we face daily, only rich ppl could be notaries.

And since we are paid close to zip for seal/oath fees, there goes the last borderguard to paperwork for the average Jill and Jack.


GREAT topic and conversation starter, Robert! Again.

Reply by Laura_V on 4/1/10 11:44pm
Msg #330062

Judges are not reasonable and fair. They are ex Attorneys!

And this is why any divorcing angry person can blame the "erroneous" award of the mansion to the "wrong" spouse.

Of course we will be named, attacked, forced to hire expensive incompetent attys to defend our perfect work.


When TCs and lenders started wanting over $100K I got the message that those greedy ppl wanted us NSAs to be the "deep pockets." That's why I never worked with them (Ameriquest was one) or got the expensive insurance.



Just a few thoughts to ponder as my spine leans toward the slumber room. (Given how deeply I am sleeping these days, it could easily be a lumber room except for the snores from pug and -of course - never me.)