Tata AIG introduces insurance bonds to aid contractors
ECONOMY & POLICY

Tata AIG introduces insurance bonds to aid contractors

Tata AIG General Insurance has rolled out surety insurance bonds to bolster the Indian government's endeavours in infrastructure development. These bonds serve as an alternative to conventional bank guarantees, facilitating contractors' more efficient participation in the sector. With the government allotting 3.3% of the GDP for the fiscal year 2024 towards infrastructure, there's substantial potential for insurance firms providing surety bonds.

The introduction of these bonds aims to assist contractors in unlocking capital, augmenting their bidding capabilities, and overcoming liquidity and capital constraints. Deepak Kumar, Senior EVP, Tata AIG General Insurance affirmed the company's commitment to addressing the pressing liquidity and capital issues prevalent in the infrastructure domain. He expressed confidence that this product would not only streamline project execution but also contribute to India's ambition of achieving a $5 trillion economy.

Surety bonds safeguard project owners from losses arising due to contractor non-performance, failure to fulfil obligations, or breach of contract terms. Tata AIG's product portfolio encompasses various types of contract bonds, including bid bonds, performance bonds, advance payment bonds, and retention money bonds, all in compliance with IRDAI guidelines. These bonds ensure that the principal party fulfils its contractual duties to the obligee. In case of default by the principal, the surety company compensates the obligee for incurred losses.

During the presentation of the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced plans to recognise surety bonds as substitutes for bank guarantees in government procurement. However, insurers note that the market uptake has been limited due to their exclusion from certain rights enjoyed by other financial creditors in bankruptcy proceedings. (Source: ET)

Tata AIG General Insurance has rolled out surety insurance bonds to bolster the Indian government's endeavours in infrastructure development. These bonds serve as an alternative to conventional bank guarantees, facilitating contractors' more efficient participation in the sector. With the government allotting 3.3% of the GDP for the fiscal year 2024 towards infrastructure, there's substantial potential for insurance firms providing surety bonds. The introduction of these bonds aims to assist contractors in unlocking capital, augmenting their bidding capabilities, and overcoming liquidity and capital constraints. Deepak Kumar, Senior EVP, Tata AIG General Insurance affirmed the company's commitment to addressing the pressing liquidity and capital issues prevalent in the infrastructure domain. He expressed confidence that this product would not only streamline project execution but also contribute to India's ambition of achieving a $5 trillion economy. Surety bonds safeguard project owners from losses arising due to contractor non-performance, failure to fulfil obligations, or breach of contract terms. Tata AIG's product portfolio encompasses various types of contract bonds, including bid bonds, performance bonds, advance payment bonds, and retention money bonds, all in compliance with IRDAI guidelines. These bonds ensure that the principal party fulfils its contractual duties to the obligee. In case of default by the principal, the surety company compensates the obligee for incurred losses. During the presentation of the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced plans to recognise surety bonds as substitutes for bank guarantees in government procurement. However, insurers note that the market uptake has been limited due to their exclusion from certain rights enjoyed by other financial creditors in bankruptcy proceedings. (Source: ET)

Next Story
Infrastructure Urban

Aadhaar Authentications Cross 27 Billion in FY25

Aadhaar authentication transactions surged past 27.07 billion in FY 2024–25, including 2.47 billion in March alone, reflecting its growing adoption across sectors such as banking, finance, telecom, and public service delivery. Since its inception, the cumulative number of Aadhaar authentication transactions has exceeded 148 billion.The Unique Identification Authority of India’s (UIDAI) AI/ML-based face authentication technology is also witnessing a sharp rise in usage. In March 2025 alone, over 150 million face authentication transactions were recorded. This biometric modality is now used ..

Next Story
Infrastructure Urban

IEPFA Holds Preparatory Meet for 'Niveshak Shivir' Initiative

The Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs, Government of India, hosted a preparatory meeting on April 28, 2025, with Nodal Officers from stakeholder companies via video conference. The session, chaired by IEPFA CEO Smt. Anita Shah Akella, focused on finalising operational plans for the upcoming ""Niveshak Shivir"" initiative—a joint effort between IEPFA and the Securities and Exchange Board of India (SEBI).""Niveshak Shivir"" aims to improve investor services and streamline the claims process by reaching out to cities with a high nu..

Next Story
Infrastructure Urban

India, France Sign Deal for 26 Rafale-Marine Jets for Navy

India and France have signed an Inter-Governmental Agreement (IGA) for the acquisition of 26 Rafale-Marine aircraft for the Indian Navy, comprising 22 single-seater and four twin-seater jets. The deal also includes training systems, simulators, associated equipment, weapons, and performance-based logistics, along with additional equipment for the Indian Air Force’s existing Rafale fleet.The IGA was signed by India’s Defence Minister Rajnath Singh and French Minister of Armed Forces Sébastien Lecornu. The agreement, along with supply protocols for aircraft and weapons, was exchanged in the..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?