( Again with apologies to William Shakespeare ) By Richard F . Lund , J . D ., Vice President , Senior Underwriter , Swiss Re *

In William Shakespeare ’ s “ Hamlet ,” the title character famously ponders , “ To Be , or not To Be , that is the question .” He reflects on the unfairness of life , yet knows that it is better than the alternative . Such is the notary ’ s dilemma . In most instances , a person who takes on the noble mantle of ‘ Notary Public ’ chooses it for himself knowing that the best way to avoid a ‘ sea of troubles ’ is not to become one . Still , they choose to do so in order to provide a valuable service to society – and their customers . But with that service , as with most things of value , comes risk . And the primary risk is the possibility of not doing the job correctly , which could ultimately lead to some error that may be of great cost .

So what is a “ notary ”? In ancient times a notary was simply a scribe who wrote in shorthand . Over the course of time , notaries became able to draft legal documents and other written instruments . To commemorate their work , they used wax seals and ribbons to show that the document had a semiofficial status . Eventually , governments saw the need to regulate their actions and to give notaries the purpose that is bestowed upon them to this day : to act as “ a person of proven integrity by the state to act as an impartial witness ” ( National Notary Association Home Study Course ). By being in such position , the notary is most commonly called upon to acknowledge that a signature placed on a legal document was , in fact , put there by the person to whom it is ascribed , and that the person signed the document in their presence . The notary does not pass judgment on the legality of the document or guarantee its truth , only that the named signatory did so in their presence .

While being a notary public may seem relatively innocuous , an error committed while exercising ones duties can be quite significant , both monetarily and emotionally . That is why the Swiss Re Corporate Solutions Insurance Agents Professional Liability ( E & O ) insurance policy provides coverage for several ancillary acts that an insurance agent or agency staff may undertake , including that of a notary public under the “ Other Related Services ” section of the policy . ( Coverage is also provided for teaching a formal insurance course , testimony as an expert witness , advertising , or services as a claims adjuster . Please see the policy itself for details or contact your state E & O administrator .) For a proper notarization to occur , it must include the following :

While these steps seem simple enough , the claims that occur can be complex because of the parties that may be involved .

The most common error associated with being a notary public is notarizing the signature of a person who later claims they did not appear in front of the notary and , in any event , the signature is not theirs . This will most likely occur when the document is a bond or some other financial guarantee that is later called into question . While it is not a claim that happens with great frequency , the severity can be quite sizable -- especially when a bond is at stake . In most such cases the bond involves some type of construction project in which there is some defect causing the entire amount of the bond to come due . Difficulty arises when the signature on the bond application is called into question . A claim in this situation is not unheard of to be in the value of 6 or even 7 figures . That ’ s right , millions of dollars over something as simple as a signature .

Another common scenario involves real estate transactions . Sometimes the property in question is sold outright , while in other cases there is a partial grant of ownership , e . g ., selling mineral rights . Did both husband and wife sign the deed ? All of the siblings with an ownership interest ? Every owner of the business ? Gathering all of the busy parties to these transactions in one place just to scribble a quick signature can be a challenge . ‘ Is it really necessary that [ the notary ] watch everyone sign in person ? I can vouch for the signature of my wife / brother / partner …’

Faced with significant pressure from all concerned to cut a small corner or two , what must one do to avoid being put in the position of having a claim made against them while acting as a notary ? Simple ! Begin by following the guidelines set out by the American Society of Notaries , National Notary Association , and your state government .

See Notary … Page 10

6 KANSAS INSURANCE AGENT & BROKER | January-February 2016 |