Penal sum

{
  "id": "MLC-T-INS-002532",
  "term": "Penal sum",
  "field": "Insurance and risk management",
  "definition": "The maximum amount of money that a surety company is obligated to pay under a bond. This sum represents the limit of the surety's liability for any default or breach of the bond's terms by the principal. The penal sum is specified in the bond agreement and is typically set to cover the potential financial loss that the obligee might incur.",
  "url": "https://mlchart.com/terminology/insurance/penal-sum/"
}