A notary bond is a guarantee of payment to the obligee (the State) should a loss occur for a penalty amount of the bond. Notary bonds are usually provided by a surety company (typically an insurance carrier).The bond generally runs concurrently with the term of the notary public's commission.nlike an auto insurance policy however, a notary bond is simply a guarantee that the funds will be available should a loss occur. The surety (insurance company) makes a payment to the State up to the penalty amount of the bond. However, this loss paid by the surety is not simply written off.