E&O Insurance – Why Do We Need It?
E&O insurance stands for Errors and Omissions Insurance, which protects a notary from getting sued. There are a lot of companies that will not hire mobile notaries because their insurance policy does not go over $100,000. Why is that? Well for a few reasons, the title, escrow, or lender has to make sure they cover their bases. If you are not insured for enough of what they would get sued you will not get hired. It is not too expensive to upgrade or go with the 100K policy anyways and worth it so you don’t get snubbed on that job and you do not want to be held personally liable if you were to get sued.
A lot of notaries do it for the peace of mind, that way every signing you are not freaking out if you did it right or not. Missing a signature is not a reason to be sued directly. There would have to be multiple implications to raise a law suit. Messing with documents, breaking the law, and not adhering to company requests could implicate a notary in court. That is why it is a good idea to get E&O Insurance. In all states it is required to have E&O Insurance so make sure you check online under your particular state for specific details. I emphasized the importance of the amount of the coverage because you will be able to choose how much you want your business to be covered for. I can’t tell you how many stories I have heard from notaries who didn’t get the insurance upgrade, then not put in a directory, or thrown out of an Escrow companies Rolodex just because they didn’t want to pay the higher monthly premium.
Prices for E&O Insurance vary and are paid yearly. The cheapest coverage is for $15K and will cost around $19 a year, very inexpensive when we are talking about protecting yourself. The $100K Liability limit tends to get steeper and costs about $195 a year. This amount is again not ridiculous and is doable for most notary publics.
Think about the bigger picture. If you don’t protect your self you can hurt your business and even family. There are plenty of notaries who get away with not paying for Insurance and come out fine. There are also horror stories of the guy next door who lost his home because the Mortgage company sued him for negligence. It doesn’t happen often, but its good to protect yourself.