Posted by George/AL on 1/10/12 10:33am
Msg #408594

E&O Insurance and Background Check

Explain reasons some companies require both E&O and Background check.
Is it an absolute necessity to have both E&O coverage and background check or just varying rules applied by individual companies?

Reply by 1Notary1 on 1/10/12 10:38am
Msg #408595

Some companies require that you have a background checked, others don't care. But, you should have E&O insurance coverage regardless for your own protection.

Reply by PegiT_MN on 1/10/12 10:46am
Msg #408596

Here is my opinion on the matter. A good title company/signing company is going to ask for a background check to make sure the notary doesn't have any felonies on their record. We are working with very sensitive credit documents and someone with a felony conviction of fraud, embezzlement, theft, etc. is not a good candidate for working in the banking business. (In the state of Minnesota, anyone can get a notary license, which I think you should have to have a background check for that too). Errors & Omission insurance is just that. If I am not mistaken, it covers you for any mistakes you might make as a notary that would cost the title company/borrower/lender any money. From what I was told, this might be if you didn't get the paperwork back in time and there was an expiring lock that cost the borrowers/lender money. Your E&O insurance would cover that. That is only one example of what I know. I am sure that our fellow notaries will be able to shed more light on that subject. Some states (Minnesota) do not require a notary to carry E&O insurance, but some title companies/signing companies may require it anyway.

I'm not an expert on this topic, but I hope my limited knowledge helped at least a little bit.

Reply by Linda_H/FL on 1/10/12 11:01am
Msg #408598

Unless it's specifically Signing Agent E&O - standard

notary E&O covers you for notarial errors ONLY - has nothing to do with your handling of the package.

Notarial errors only...

Reply by PegiT_MN on 1/10/12 11:09am
Msg #408599

Re: Unless it's specifically Signing Agent E&O - standard

Thank you Linda. I carry a $50,000 policy, but I am really not sure what I am covered for. I know that is bad, it's not a requirement of my state, and I just make sure I am very careful not to make any mistakes that could possibly come back to haunt me.

Reply by George/AL on 1/10/12 11:15am
Msg #408601

Re: Unless it's specifically Signing Agent E&O - standard

That is another question, how much coverage does a notary need?
At what point are you just overinsuring yourself?

Reply by Ernest__CT on 1/10/12 11:14am
Msg #408600

Agree with Linda

Every Notary Public, whether or not they do loan signings, should have E & O insurance! In CT, for example, there is no limit on the Notary's liability. One mistake could lose you your house.

Linda is also correct about E & O not covering late docs. That's not Notary error; that's carelessness.

Reply by PegiT_MN on 1/10/12 11:27am
Msg #408603

Re: Agree with Linda

This is becoming a very informational thread. Can one of our experts please give us some examples of what our E&O Insurance would cover? Thank you.

Reply by Ernest__CT on 1/10/12 11:42am
Msg #408607

E & O would cover ...

... a missed signature; an incorrect date; accidentally printing the initial "T" when the signer's initial is "I"; putting the wrong county in the notarial block.

Anyone care to add more?

Reply by PegiT_MN on 1/10/12 11:44am
Msg #408608

Thank You Ernest! n/m

Reply by Dave Bullock on 1/10/12 1:21pm
Msg #408622

Re: Thank You Ernest!

my understanding, is that the background check is dictated by the underwriters. This being the case, if they get a loan where the underwriter is old republic, for instance, they can only offer it to a notary that can demonstrate that they hace a bgc

Reply by oldhippie_IL on 1/10/12 2:57pm
Msg #408639

Background check

Another question. Do you have get a background check yearly?

Reply by JanetK_CA on 1/10/12 4:52pm
Msg #408652

Re: Background check

As far as I'm aware, there are no legal requirements for either E&O insurance or a background check in most states. Exceptions would be California (and possibly a few others?) that require a BGC as a precondition to getting or renewing a notary commission every four years. Beyond that, the requirements depend solely on the lender or title company and will vary from one to another.

Reply by roxierox/TX on 1/10/12 7:05pm
Msg #408672

Re: Agree with Linda

Notaries can be easy targets for lawsuits — even when they have done everything right — and mandatory surety bonds only protect signers from financial damages, not Notaries. It’s essential that Notaries support their best practices with protection such as Errors and Omissions (E&O) insurance to cover legal costs if ever embroiled in a costly liability situation.

Reply by 1Notary1 on 1/10/12 1:28pm
Msg #408623

Linda is correct n/m

Reply by Buddy Young on 1/10/12 6:34pm
Msg #408661

Re: Linda is correct n/m

Reply by FGX/NJ on 1/10/12 6:15pm
Msg #408660

Has anyone here collected or know of any Notary who has collected on NOTARY E&O
insurance?

Reply by MW/VA on 1/10/12 6:55pm
Msg #408666

A notary wouldn't collect on E&O. It would be the client/

attorney who brought the claim. What you're insuring yourself against is the legal costs of a lawsuit. I don't remember ever seeing anyone who admitted to having a claim filed against them.
BTW, I just renewed my Signing Agent E&O for another year. $220 here on NR. I also have a Business Liability Policy. My total insurance costs run about $500 year, which is only a little over $40 a mo.
IMO that's a pretty good umbrella to have for the money.

Reply by Linda_H/FL on 1/10/12 7:06pm
Msg #408673

There was a notary/atty here from MA who had a claim -

actually, a lawsuit, filed against them resulting from a RESPA signing - not sure if it fell under their E&O or bond....