Insurance Security Bond

What is Surety Bond?

A Surety Bond = A promise from an insurance company that says, “If the contractor doesn’t do the job properly, we will cover the loss.” A Surety Bond is a financial guarantee issued by an insurance company.
It assures the government that the contractor will fulfill the tender obligations. If the contractor fails, the insurance company covers the loss. This helps contractors avoid blocking large sums as cash or bank guarantees.

How Surety Bond is better than Bank Guarantee

No Cash Margin Required – Unlike Bank Guarantees, Surety Bonds don’t block 10–30% cash or collateral.
Preserves Bank Limits – Contractors can save their bank credit limits for working capital and project needs.
Faster & Easier – Bonds are issued quickly by insurers with simpler documentation.
Cost-Effective – Lower charges compared to bank guarantees, reducing financial burden.

Types of Surety Bond

Bid Bond

A Bid Bond is a type of Surety Bond submitted with a tender.
It guarantees that the contractor will honor the bid if awarded the project.
If the contractor backs out, the government is protected from financial loss.
This builds trust and allows fair competition in government tenders.

Performance Bond

A Performance Bond guarantees that the contractor will complete the project as per the contract.
If the contractor fails, the insurer compensates the government for losses.
It ensures quality, timely completion, and contract compliance.
This builds trust between the contractor and the government.

Get a Free Quote

WE guarantee you to provide the best quote!
Email us your request at info@ckpinsurance.co.in