Insurance Surety Bond

Santhosh Kumar 13/11/2023
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Insurance Surety Bond mind map Context National Highways Authority of India (NHAI) Innovations Accepting Insurance Surety Bond In place of Bank Guarantee For Toll Operate Transfer (TOT) Significance First use in road infrastructure sector Aims Boost liquidity Encourage private participation In highway development Promote 'Ease of Doing Business' Partnership With insurance companies Role Serve as financial guarantee Traction Over 40 bonds issued For various NHAI contracts Potential For wider adoption Source: PIB Ministry of Finance, Government of India Recognition e-BGs and Insurance Surety Bonds At par with Bank Guarantees Role In government procurements About Surety Bonds Nature Legally binding contract Unique type of insurance Parties Three-party agreement Guarantee Compliance Payment Performance of an act Promise To be liable for Debt Default Failure of another Participants Principal Debtor Surety Third person Responsible for payment If principal fails Usage As assurance Issuer will pay debts Example Substitute for bank guarantees In government procurement

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