The Essential Checklist for Getting a Insurance Security Bond for Tender Projects in India

To secure a surety bond or insurance security bond for a tender in India, a company must prepare and provide detailed documentation about its business, the project, financial status, and risk profile. Below is a comprehensive guide, based on industry and regulatory sources, as well as the extracted requirements from the New India Assurance proposal form.

Key Requirements for Obtaining a Surety Bond

Company Details and Eligibility

• Applicant Entity Information: Full legal name, registered address, parent group (if any), date of incorporation, and paid up/authorized capital.

• Management and Ownership: Names, addresses, shareholding patterns, and net worth of promoters, directors, and beneficial owners.

• Accreditations and Ratings: Certifications by relevant authorities and latest credit/agency ratings (CRISIL, ICRA, etc.).

Tender and Project Specifications

• Beneficiary Information: Name and type (public/private) of the project owner or principal.

• Project Overview: Contract value, tenure, tender ID, purpose, and detailed description of the project for which the bond is required.

• Bond Type and Terms: Specify if the bond is for bid, performance, or advance payment. Details of bond value, period, and inception date.

• Supporting Documents: Attach draft agreement, Request for Proposal (RFP), relevant project approvals, and detailed feasibility reports.

Financial and Risk Assessment

• Banking and Guarantees: Latest sanction letters from banks, details of banking limits, utilization, and existing guarantees (corporate/personnel).

• Audited Financials and Tax Returns: Last 5 years of audited accounts and last 3 years of Income Tax Returns (ITR).

• Track Record: Completion status of past projects, ongoing projects, and future order book.

• Cash Flow and Payment Structure: Detailed cash flow projection and payment schedule for the project.

Legal and Compliance Factors

• Contract Clauses and Laws: Disclose any unusual or specific legal clauses (force majeure, political risks, penalties, price variation).

• Past Invocations and Legal Actions: Details of any previously invoked bank guarantees, government actions, or blacklisting issues.

• Subcontracting Details: Identify underlying subcontractor risks, their scope, and risk mitigation strategies.

Required Documentation (as per IRDAI Guidelines)

Requirement	Description & Source
Company Profile	Registered business, capital, directors
Project/Tender Details	Scope, value, duration, approvals
Financial Records	Audited accounts, ITRs, bank limits
Legal/Contract Compliance	Agreements, RFP, legal clauses/documents
Risk Reports	Feasibility/DPR, credit ratings, guarantees
Past Performance & Track Record	Completed, ongoing projects, history
Declaration of Outstanding Issues	Invocations, litigations, blacklisting

Industry Best Practices

• All supporting documents should be matched with the proposal requirements to improve acceptance chances.

• For NHAI or public projects, disclosure of legal and blacklisting status is crucial.

• Insurance surety bonds must be issued by IRDAI-approved general insurers, and executed per prevailing stamp duty laws.

Conclusion

Companies seeking a surety bond for tender participation in India need to provide extensive information covering legal, financial, and project-specific aspects, along with a clean track record and comprehensive risk disclosures. Adhering strictly to IRDAI guidelines and insurer requirements ensures the proposal is complete and substantially increases the likelihood of obtaining the bond successfully.

Ready to bid with confidence? Contact CKP Insurance at 9920099273 or info@ckpinsurance.co.in for expert guidance and a fast quote on your surety bond—let our specialists help you secure your tender and succeed with complete peace of mind.