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Insurance Surety Bonds — a faster, collateral-light alternative to Bank Guarantees.
A surety bond is a tripartite agreement where a general insurance company (the “surety”) guarantees your performance to the beneficiary (the “obligee”), typically without locking up cash margin or your bank credit limits. Central government rules now put surety bonds on par with Bank Guarantees for public procurement.
Bonds for every stage of a contract
Bid Bond
Used in place of Earnest Money Deposit (EMD) — guarantees you’ll sign the contract if your bid is accepted.
Performance Bond
The most widely issued surety bond in India — guarantees contract execution as per the agreed scope and schedule.
Advance Payment Bond
Secures a mobilisation advance paid to the contractor, refundable to the obligee if obligations aren’t met.
Retention Money Bond
Lets you claim retained contract payments early by bonding your defect-liability obligations instead.
Contract / Warranty Bond
Covers post-completion warranty or maintenance obligations for a defined defect-liability period.
Customs / Statutory Bond
Used to secure statutory or customs obligations in place of a cash deposit or bank guarantee.
Why contractors are switching
No cash margin lock-in
Typically no FD or collateral required, freeing up working capital.
Bank limits stay free
A surety bond doesn’t utilise your sanctioned bank credit lines.
Underwritten on track record
Insurers assess project experience and financials, not just collateral.
Regulator-backed
Governed by the IRDAI (Surety Insurance Contracts) Guidelines, 2022.
Recognised for procurement
Ministry of Finance has directed central ministries, PSUs and departments to accept surety bonds at par with Bank Guarantees.
How BharatBG helps
- We match your project profile to the insurer most likely to underwrite it quickly.
- One documentation set, submitted digitally, shared across insurers we approach.
- A dedicated case manager follows up with the insurer’s underwriting desk on your behalf.
- Guidance on which of your tenders already accept surety bonds — see the department list below.
Insurers issuing surety bonds in India
These general insurance companies are actively underwriting surety bonds under the IRDAI (Surety Insurance Contracts) Guidelines, 2022. Product availability, bond limits and pricing vary by insurer and project profile.
List reflects insurers publicly reported as actively issuing surety bonds as of July 2026. Ask your BharatBG case manager for the current panel and product fit.
Departments & PSUs accepting Surety Bonds
Following the Ministry of Finance's August 2022 Office Memorandum, over 120 government entities now accept insurance surety bonds at par with Bank Guarantees. Key adopters include:
Illustrative list of prominent adopters — not exhaustive. Always confirm with the inviting department or check with us before bidding.
Surety Bonds, explained
Who are the parties to a surety bond?
Three parties: the Principal (you, the contractor/bidder), the Surety (the insurance company guaranteeing performance) and the Obligee (the beneficiary — usually the government department or private client).
Is a surety bond legally equivalent to a Bank Guarantee?
For central government procurement, insurance surety bonds have been recognised as an acceptable alternative to Bank Guarantees under the General Financial Rules, and are governed by the IRDAI (Surety Insurance Contracts) Guidelines, 2022. Always check the specific tender document, as acceptance and format requirements vary.
Does a surety bond require collateral like a BG does?
Typically no cash margin is locked up the way it is with a BG. Insurers instead underwrite based on your financial strength, project experience and track record, which may include counter-indemnity and financial documentation.
Can I use a surety bond for a private-sector contract?
Yes, several insurers offer surety bonds for private infrastructure and EPC contracts as well, though government adoption has moved faster given the Ministry of Finance mandate.
Find out if your next tender accepts a surety bond
Share your tender or contract details — we'll confirm eligibility and bring you insurer quotes.