India’s First Surety Bond Insurance

Current Context: India will launch its first surety Bond Insurance Product on December 19, 2022.

This is launched by the Union Minister of Road, Transport and Highways, Shri. Nitin Gadkari.
This bond is launched for Infrastructure projects.
This bond will reduce the dependence of infra developers on bank guarantees.
This surety bond is launched by the Bajaj Allianz General Insurance company.
This will help in improve road connectivity and increase employment opportunities.
A surety bond is a tool for the Principal and shields the Principle from the losses that may arise in case the contractor fails to perform their contractual obligation.
The insurance company will provide security arrangements for principal and infrastructure projects.
The principle can be claimed by the insurance company if the contractor doesn’t fulfill the requirement.