Submission Date:
Question:
Should libraries that have Notaries Public on staff have notary liability insurance for those library staff? Or would that be covered by the library's general liability insurance? We don't want our staff who are providing Notary Public services to be putting themselves at risk.
Answer:
These are very important questions.
Just in case any reader needs a refresher, a "notary public" in New York performs critical services: administering oaths and affirmations, taking affidavits and depositions, certifying acknowledgements or proof of critical documents (such as real property deeds, mortgages, and powers of attorney), and certifying copies of official documents.
Anyone who has ever had to have a document notarized knows how important finding "a notary" can be.
In New York, the power of notaries is summarized in Article 6 of the Executive Law.
Of relevance to the member's question, that law also imposes penalties for mis-applying a notary’s power:
"For any misconduct by a notary public in the performance of any of his[1] powers such notary public shall be liable to the parties injured for all damages sustained by them."
So, what does "misconduct" by a notary, for which they "shall be liable" look like?
Examples found in the case law of New York include:
- Inattention to authentication of a signature resulting in allegations of a forged real property deed (Chicago Title Insurance Company v. LaPierre, 2013);
- "Gross negligence" asserted after a notary allegedly authenticated a forged signature, causing a person not on a lease to be sued for its violation (Independence Leasing Corporation v. Acquino, 1986);
- A bank suing for "notarial misconduct" when a forged signature led them to rely on a document guaranteeing a loan (Marine Midland Bank v. Stanton, 1990).
In each of these cases, the "liability" led to demands for money related to the alleged misconduct...as well as legal fees for having to sue.
Also of relevance to the member's questions, in addition to personal liability of a notary, case law shows that when misconduct is asserted against a notary who performed the service as part of their employment, the employer was also named (which is what happened in the Independence case listed above).
Of course, not all assertions of notarial misconduct will be found to be valid. But since even a case brought in error requires a timely and effective defense, an assertion of notarial misconduct can cause expense (and stress!) for the notary (and their employer). Which is why the member is rightly concerned about protecting a library employee serving as a notary.
With all that as background, to answer the member's questions, here are five critical steps before any employee should serve as a notary public as part of their work for a public (including association) library:
1. Before offering the notary services of an employee, a library should confirm with their insurance carrier that their coverage includes a claim of "notarial misconduct."
In New York (and throughout the country, but we're focusing on New York here), different insurance policies include (and exclude) different coverage for things.
Because of this, there is no one "type" of coverage I can assure readers that will always cover an assertion of notarial misconduct.
And because of that, a library should work with its insurance broker and/or insurance advisor, or directly with the carrier, to ensure (and then be assured, in writing) that such coverage is included in their policy (and extends to employees).
This is critical not only when insurance is first obtained, but whenever the carrier issues a new policy (or when there is a change of carriers).
2. Before offering the notary services of an employee, the library should confirm that offering notary services is in the employee's job description.
An employee who has taken the time to study the requirements, passed the exam, maintained the license, and operates as a notary as part of their work at the library, is taking on risk to offer something of value to the community. Adding that ability and service to an employee's job description accomplishes two important things.
First, it acknowledges the value of the license held by the employee.
Second, by making it clear that the employee is offering notary service as part of their job, it helps ensure that the library's insurance coverage will cover the employee if there is an assertion of notarial misconduct[2].
If the library cannot amend a job description to include this ability, the provision of notary services should not be a part of library services offered.
Further (and this is critical) if the library can't consider the employee to be offering notary services as a service, the employee should not notarize documents when "on the clock" for the library.
3. Before offering the notary services of an employee, the library should confirm the adequacy of its internal procedures.
A notary public's function requires several things to ensure compliance: time to perform the function properly, good record-keeping to ensure that the function was properly performed, and consideration of how such records will be kept secure and confidential.
An example of this is found in the new guidelines for remote notary posted at dos.ny.gov/notary-public.
In addition to what is required by law, the library's insurance carrier may also have some requirements, so a solid internal procedure should include their input, at well.
And of course, whatever is needed should be supported in the library's budget.
4. Before offering the notary services of an employee, the library should confirm how it promotes awareness of the service.
Section 135-b of the Executive Law also sets some rules for how notary services are advertised! Because of this, libraries should be careful about how the notary services are promoted. For more on that, see the rules posted by the New York Department of State at:
https://dos.ny.gov/system/files/documents/2022/04/notary.pdf
And finally...
5. Please don't let the red tape in this answer stop your library from offering notary service.
I know the considerations of this answer have gone a little further than the specific content of the question.
Further, I know that words like "liability" and "misconduct”, and "insurance" can be intimidating, and signal expense.
However, for anyone out there who has ever had to desperately search for a notary public on a time-sensitive basis, you know that assured notary services are a real boon to a community.
I encourage any library who is offering notary public services, who may read this and think "uh-oh," to consider it a critical community service that is very much worth the time and effort to properly support.
In addition, I urge libraries to support and honor the hard work of any employee who has obtained their notary license by ensuring these steps and make sure they have the proper resources to offer the service confidently.
In that spirit...many thanks to the member for an important set of questions!
[1] This is a verbatim quote. Although the use of the pronoun "he" suggests there could be a loophole for those who use another pronoun, notarizing is a non-gendered sport for anyone who has attained the age of 18, and charges of misconduct are open to all.
[2] Of course, if the alleged misconduct is willful (for instance, aiding with deliberate fraud) the carrier will likely disclaim coverage of the employee...but may still cover the library (a scenario to discuss with the carrier).
