Code of Practice
Chapter 17. Insurance
Notaries are required to hold professional indemnity insurance and fidelity insurance cover. The detailed requirements for the maintenance of insurance by a notary are contained in the Practising Certificates Rules. A practising certificate will only be issued to a notary if the application is accompanied by a current certificate of insurance against civil liability covering the notary in connection with his or her practice as a notary (professional indemnity insurance) and a current certificate of insurance against financial loss suffered by a third party in consequence of any dishonest or fraudulent act or omission in connection with his or her practice as a notary (fidelity insurance).
Professional Indemnity Insurance
The Master of the Faculties has made an order directing that the minimum level of professional indemnity insurance cover for notaries is £1,000,000. Subject to that minimum level of cover, notaries should ensure that professional indemnity insurance cover is at an appropriate level for their practices. Notary-conveyancers and notary-probate practitioners in particular should take out cover for considerably more than the minimum prescribed level.
Notaries are required to provide “appropriate notarial services to any person lawfully and reasonably requiring the same”. You should therefore ensure that your insurance cover is sufficient to meet that requirement and contains no restrictions that would affect your ability to provide appropriate notarial services. In particular, enquiries should be made of any insurance company offering professional indemnity insurance to notaries to verify that the cover extends to transactions in Canada and the United States of America as some insurers are unwilling to offer cover for these countries or may charge an additional premium.
Solicitor-notaries and Professional Indemnity Insurance
With regard to professional indemnity insurance, it is helpful to consider solicitor-notaries separately. The Solicitors Regulation Authority takes the view that, for the purpose of professional indemnity insurance the notarial practice of a solicitor-notary may be regarded a part of his practice as a solicitor. On that basis they require insurers providing professional indemnity insurance to solicitors to offer this additional cover for notarial work if it is treated as part of the solicitor’s practice. There is, however, no obligation on the solicitor-notary to treat his or her notarial practice as part of a solicitor’s practice for the purposes of insurance, nor is the solicitor-notary under any obligation to ask the insurers covering the solicitor’s practice to provide cover for the notarial practice. All solicitor-notaries should therefore make sure that their own insurance or their firm’s insurance covers notarial practice. The Master of the Faculties requires specific confirmation direct from the insurers referring to professional indemnity insurance cover for the named solicitor-notary.
The position of notaries who are assistant or consultant solicitors, as opposed to partners or LLP members, may be more complicated and can cause confusion. Some firms of solicitors, and the insurers of some firms of solicitors, do not regard notarial work as part of the solicitors’ practice unless the notarial fees are taken by the firm. If the firm takes that view, the solicitor-notary may have to arrange separate professional indemnity insurance cover for his or her notarial practice.
All notaries, whether solicitor-notaries or not, may source professional indemnity insurance on the open market.
A notary who provides conveyancing or probate services as a notary must declare those activities to his or her insurance provider and ensure that the policy provides adequate cover for those activities.
If a solicitor-notary’s professional indemnity insurance policy states that it covers fidelity insurance then the Faculty Office will accept this, but the trend is for policies not to do so, particularly for employed or consultant solicitor-notaries.
Sole practitioners currently have to obtain fidelity insurance through the Notaries Guarantee scheme. Other notaries may obtain fidelity insurance on the open market.
Other forms of insurance
Notaries who see clients at their place of business should be aware of the need to have those premises adequately insured not only in terms of safeguarding equipment, clients’ files, records, and work in progress, but also to cover the necessary public liability insurance to safeguard staff and visitors to the premises.
- Notaries hold current professional indemnity insurance, fidelity insurance and other appropriate insurance cover at an appropriate level at all times.
- The professional indemnity insurance held by a notary covers the production of notarial acts for use throughout the world, without restriction.
- Practising certificates are issued only on production of proof of adequate and appropriate insurance.
- The interests of clients are protected by the profession’s insurance requirements so that, if an error or omission is made in dealing with their matters, financial redress is available.
- You hold valid current professional indemnity insurance to cover all the services that you provide as a notary.
- If you provide conveyancing and/or probate services as a notary your professional indemnity insurance policy clearly states that these activities are covered, and your insurance level is increased to a level that reflects the increased risk in carrying out these activities.
- Your staff are covered by your Employer’s liability insurance.
- You promptly notify insurers in writing of any facts or matters which may give rise to a claim under a professional indemnity insurance policy approved by the Master of the Faculties.
- Subject to the minimum level prescribed by the Master of the Faculties, you assess and purchase the level of professional indemnity insurance cover that is appropriate for your current and past practice, taking into account potential levels of claim by your clients, and you comply with the terms of such insurance policies.
- You fail to renew your professional indemnity insurance which lapses during the practising certificate year but continue to practise, resulting in a major breach of the Master’s Rules.
- You carry out work for clients and then discover that you are not insured for that work, resulting in a breach of the Master’s Rules.
- You obtain professional indemnity insurance and fidelity insurance at the lowest limit prescribed by the Master of the Faculties to cover your notarial services when the nature of the work that you carry out requires a higher limit.
- You decide to carry out a conveyancing transaction as a notary but neglect to inform your insurers that you are doing this work as a notary with the result that you carry out a Reserved Legal Activity without the appropriate insurance and without the appropriate protection for your client.