E&O Insurance vs Notary Bond | Why Do Signing Agents Need It?

Let's talk errors and admissions insurance. Hi, I'm Mark Wells, America's largest notary public loan signing agent coach, and I'm often asked, what exactly is errors and admissions insurance and why do notary public loan signing agents even need it? And I'm also asked, how does E O insurance differ from a notary bond? So let's get started with errors and admissions insurance specifically also known as E and O insurance, which is just liability coverage that is created to protect you. The notary public loan signing agent E and O policy will pay on your behalf any financial losses you can incur as a notary due to an error you made. Think of E and O insurance like your car insurance. Let's say you get into a car accident, the car insurance company pays for everything on your behalf, whether the accident was or was not your fault. You0 money comes out of your pocket except for the cost of the deductible. And E and O insurance works the same way. You make an accidental mistake and that incurs financial losses. The E and O insurance pays for every penny up to your policy amount and you only pay the deductible. And like car insurance, E and O insurance is rarely ever used. In fact, I have taught over 90,000 signing agents and and only a handful have ever even used their E and O insurance. So the question is, why do you even need errors and omissions insurance if it is rarely ever used by notary signing agents? Well, the truth is it's kind of required to be a notary signing agent. As the largest two title companies in America, Fidelity Title and First American title companies, require notary public loan signing agents to carry an E and O insurance policy to do signings for their title companies. So while it is not required across all title companies in America, I do tell my students, if you want to maximize your signing opportunities, it is a smart move to have coverage. But the real question is then why is it even required by the big title companies for notary signing agents to even carry ea O insurance? And the answer is simple. It is the title companies want to ensure by the off chance you make an error that does incur financial loss, you actually have the insurance that guarantees that their client's financial loss will actually be covered. Errors and emissions insurance will pay the cost of any claims and lawsuits resulting from your unintentional errors up to your policy limit. So if you have $100,000 policy, it will cover you up to $100,000. And not only will insurance pay out the actual damages to an injured party after a court vidic or out of court settlement. But it will also pay your attorney costs, your legal fees, your court costs, and any other defense costs up to your policy limit. Remember, if someone blames you for something you did not do, you could still be faced with court costs for defending yourself. The beauty of E and O insurance coverage is that they would cover those legal costs for you. It would not come out of your pocket except for the deductible. Errors and emissions insurance is just like car insurance. You'll be glad you have it when you need it. So in conclusion, errors and emissions insurance will cover the insured notary public loan signing agent for unintentional actions performed during a term of a policy up to the policy limit. Make sure to read your fine print. But most policies will cover you while your policy was in place. So let's say an error occurred in 2020 and you had your policy at that time, but someone blames you for misconduct in 2024. That happened in 2020 and your policy expired. But it's not unusual for the policy to cover your claim as long as you are covered with when the unintentional mistake actually took place. How cool is that? Now let's talk about a notary bond. The notary bond is a requirement for you to actually become a notary in your state. It is not optional like E and O insurance. The state you are being commissioned in will require it to become a notary in your state as the notary bond protects the public, not you the notary. Let me say that again, the notary bond protects the public, not you. So if you the notary makes a mistake, violates regulations or engages in misconduct and it causes financial harm to the person that you notarized, the bond acts as a financial guarantee ensuring that those affected by the notary's action can receive compensation for the damages up to the bond amount. The biggest misnomer notary public loan signing agents make is that they think their state required notary bond acts like E and O insurance. It does not. One of the biggest differences is if the surety company makes a payment on your claim, you are required to pay them back and it only covers damages, not your legal expenses incurred. Remember, E and O insurance pays your claim and legal expenses up to your policy limit and you don't have to pay them back for the claim. So back to the notary bond. The state wants to ensure the public is covered for some financial losses. Since E O insurance is optional for notary public loan signing agents, the state required surety bond protects the public you are working for, not you. And now you know the differences. E protects you and the notary bond protects the public. E and O is optional. The notary bond is not. You know insurance is not required by law to have as a notary public, but as a notary public loan signing agent I think you can now see why it is imperative to have it is there for you to reduce your risk and avoid the financial loss of any potential lawsuit. Now that you understand why you need EO insurance, the last question is how big of a policy do you really need? Now my recommendation is $100,000 policy as that is the amount Fidelity and First American require a notary public loan signing agent to have. Those two title companies hold about 30% of all title business in America. So if you don't get a $100,000 policy you will lose out on about 30% of signing opportunities and the cost is minimal, about $25 a month or less as some insurance companies allow you to pay for it annually. If you need a good referral for errors and emissions insurance, simply click on the link on this video or down below and there are many companies out there provide ENO insurance for notary public loan signing agents. I'm Mark, I teach the loan signing system and I look forward to helping you make money as a notary public loan signing agent. Sam.