The surety insurance market is skewed towards lower quantum bid bonds

24 Jul 2024 CW Team

To provide an alternative to traditional bank guarantees and help contractors participate more effectively in infrastructure, Tata AIG General Insurance introduced surety insurance bonds to support the Government's infrastructure development initiatives. The Government has allocated 3.3 per cent of the GDP for FY2024 for infrastructure, creating significant potential for insurance companies offering surety bonds, which will enable contractors to unlock capital, enhance their bidding capacity and overcome liquidity and capital constraints. Deepak Kumar, Senior Executive Vice President and Head, Reinsurance, Credit and Aviation Insurance, TATA AIG General Insurance, in an email interaction informs R SRINIVASAN about what makes security bonds more ideal compared to traditional bank guarantees and shares his views of the bond market in 2024 and going ahead. Excerpts:

Security bonds are designed to provide an alternative to traditional bank guarantees, helping contractors participate more effectively in the infrastructure sector. What makes them preferable?
The fact that surety bonds will be offered without the requirement of a collateral or margin money makes them an economical option for contractors vis-à-vis bank guarantees. Although bank guarantees look cheap to the naked eye, there is a hidden cost that comes with the requirement of collateral or margin money.

To read the full story, CLICK HERE

Resources

03 Jun 2026

Jyoti Structures Launches Heat Safety Drive Across Sites

Jyoti Structures (JSL) has strengthened heat safety measures across its project sites and manufacturing facilities as temperatures rise across India. The company has implemented a Summer Safety Plan covering all transmission line projects to address risks related to heat stress, dehydration and worker fatigue.The initiative includes rescheduling work away from peak afternoon temperatures, provision of drinking water, ORS and lemon-salt solutions, and installation of rest shelters near work areas. Daily toolbox talks, worker health monitoring, first-aid preparedness, emergency transport arrange..

MHADA Declares 82 Buildings Most Dangerous in Central and South Mumbai

The Maharashtra Housing and Area Development Authority (MHADA) has declared 82 buildings as most dangerous across Central and South Mumbai and has appealed to residents to vacate immediately. The list, prepared after structural assessments by the authority, identifies buildings judged to pose imminent risk to occupants and to passersby. Local civic bodies have been asked to coordinate evacuations and to make arrangements for temporary shelter and rehabilitation for displaced households. Officials said the authority prioritised buildings with visible structural distress, severe cracking, tiltin..

Damage Reported At Halwara Airport Terminal After First Rains

Severe damage was reported at the terminal of Halwara Airport during the first major rain spell of the season, prompting immediate concern among aviation and local authorities. Images from the site showed water ingress and visible deterioration of the terminal interior, affecting passenger areas and ancillary services. The airport authority suspended certain operations temporarily to assess structural safety and ensure passenger wellbeing. Preliminary inspections have prioritised electrical systems and roof seals to prevent further water ingress. State aviation officials ordered a formal inqui..