What does Penal Sum mean? Read on to discover the definition & meaning of the term Penal Sum - to help you better understand the language used in insurance policies.
Similar to an insurance policy limit, the penal sum represents the maximum amount a surety company will pay under a bond. The amount of the penal sum is typically stated as a percentage of the underlying contract price. The required percentage will vary based on the type of the bond.
We hope the you have a better understanding of the meaning of Penal Sum.