Formula
Gross penalty = events × penalty per event. Mitigated penalty = gross × (1 − mitigation reduction). Probability-weighted exposure = (mitigated penalty × enforcement probability) + remediation cost.
What the result means
The main result is a scenario-weighted planning amount, not a prediction of what an authority, court, or counterparty will impose.
Penalty structures may include caps, tiers, per-day accrual, willfulness multipliers, cure periods, reinstatement charges, or loss of rights. Model the applicable rule with qualified counsel.