                                 CODE OF VIRGINIA

LIMIT WHEN PENALTY OF BOND EXCEEDS ACTUAL EXPOSURE TO RISK (§ 38.2-2404)

When the penalty of a suretyship obligation exceeds (i) the amount of a judgment
described on the obligation as appealed from and secured by the obligation, (ii)
the amount of the subject matter in controversy, or (iii) the amount of the
estate held in trust by the person acting in a fiduciary capacity, the bond may
be executed by any fidelity and surety insurer if the actual amount of the
judgment or the subject matter in controversy or estate not subject to
supervision or control of the surety is not in excess of the limitation
specified in § 38.2-208. When the penalty of a suretyship obligation executed
for the performance of a contract exceeds the contract price, the contract price
shall be taken as the basis for estimating the limit of risk specified in §
38.2-208.

HISTORY: 1952, c. 317, § 38.1-642; 1986, c. 562.