6.4 Liability and Damages

The Personal Liability Rule

CGS Sec. 3-94l is the liability statute (note: it is 3-94l, not 3-94i). It provides that a notary public shall be liable to any person for all damages proximately caused to that person by the notary's official misconduct. Three features make this exam-critical:

• "Any person" — liability is not limited to the signer; anyone who relies on the flawed notarization and is harmed can sue.
• "All damages proximately caused" — there is no statutory cap in Connecticut.
• "Official misconduct" is the trigger — and as defined in Sec. 3-94a, that includes negligence, so an honest mistake can still produce liability.

Employer Liability Under Sec. 3-94l

Sec. 3-94l does not stop at the individual notary. An employer of a notary is also liable for damages proximately caused by the notary's misconduct related to the employer's business if the employer directed, encouraged, consented to, ratified, or approved the misconduct — either in the specific transaction or implicitly through previous similar conduct. Conversely, if an employer coerced the misconduct by threat (such as demotion or dismissal tied to a particular act), the employer is liable to the notary for damages the notary must pay. This two-way structure is a favorite exam point.

Types of Damages a Notary Might Owe

Risk Management: Bond and Insurance

Connecticut does not require a surety bond or errors-and-omissions insurance to hold a notary commission. That absence shifts the entire financial risk onto the notary, which is exactly why protective measures matter.

• Errors-and-omissions (E&O) insurance is optional but strongly recommended. It can pay legal-defense costs, settlements, and judgments arising from honest mistakes — it does not cover deliberate fraud.
• A notary journal is your single most valuable defense: a contemporaneous record of who appeared, the identification examined, the date, and the act performed.

If You Discover a Mistake

Do not quietly alter or re-stamp a completed document to hide an error — that can convert a negligent slip into an intentional act and deepen liability. Instead: contact the affected parties to arrange a proper correction or re-notarization, consult an attorney, notify your E&O insurer if you carry coverage, and document exactly what happened and when.

Worked Scenario

A notary, rushing, certifies an acknowledgment without checking the signer's ID, and the document turns out to be a forged deed used to steal a home. The defrauded buyer sues. Under Sec. 3-94l the notary is personally liable for all damages proximately caused — potentially the full value of the property, plus legal fees — with no cap. If the notary's employer told staff to skip ID checks to move faster, the employer may share liability for directing the misconduct. With E&O coverage, the insurer might fund the defense and a settlement; without it, the loss falls entirely on the notary.

Understanding "Proximately Caused"

The phrase proximately caused in Sec. 3-94l is doing real work, and the exam may probe it. Proximate cause means the harm must flow from the misconduct in a reasonably direct, foreseeable way — the misconduct must be a substantial factor in producing the loss, not a remote or accidental link. If a notary properly verifies a signer who later commits an unrelated crime, the notary is not liable, because the proper notarization did not cause that crime. But if a notary skips the ID check and that omission is what let a forger pass, the resulting loss is proximately caused by the notary's negligence, and the full damages attach.

This is why careful procedure is also the best liability defense: when you do the act correctly, you break the causal chain. A forger who presents a genuine-looking fake ID may still slip through a diligent notary, but a notary who actually examined the ID, required appearance, and journaled the encounter has a far stronger argument that any later fraud was not proximately caused by their conduct.

No Mandatory Bond — A Connecticut Quirk

Many states require notaries to post a surety bond, but Connecticut does not. A surety bond, where it exists, protects the public by guaranteeing a pool of money to pay claims, and the notary then repays the surety. Errors-and-omissions insurance is different — it protects the notary by covering defense costs and judgments from honest mistakes. Because Connecticut requires neither, a Connecticut notary who carries nothing faces unlimited personal exposure under Sec. 3-94l with no buffer at all.

Candidates should be ready to distinguish these two instruments: a bond protects the public, E&O protects the notary, and neither is required in Connecticut.

A Practical Liability-Reduction Routine

The surest way to never owe damages is to never commit misconduct. Build a fixed routine for every notarization and follow it without shortcuts:

1. Confirm the signer is physically present (or live via authorized remote notarization).
2. Examine current, valid identification and compare the photo, name, and signature.
3. Verify the document is complete with no blank spaces.
4. Use the correct certificate — administer an oath for a jurat, confirm willingness for an acknowledgment.
5. Date the act with the true date and complete every certificate field.
6. Record the act in your journal, including the identification relied upon.

Each step both prevents a category of misconduct and creates evidence that the act was done correctly. Paired with E&O coverage, this routine turns the open-ended liability of Sec. 3-94l from a constant threat into a manageable, well-documented risk. If a claim ever arrives, your journal and your insurer — not your personal savings — carry the weight.