The State Bank of India (SBI)'s non-life insurance division, SBI General Insurance, announced the release of the “General Surety Bond Bima (Conditional & Unconditional)” insurance product on Tuesday.
Infrastructure projects will use surety bond insurance as a security measure to protect both the principle (the person who awards the contract) and the contractor.
According to a statement by SBI General, the product is intended to provide protection against contractual violations by contractors during either the project's performance phase or the bidding phase.
According to the statement, the surety insurance policy includes a variety of bonds, including bid bonds, advance payment bonds, performance bonds, and retention money bonds.
He said that the product satisfies the needs of a variety of contractors, many of whom are working in the present day's more unstable environment.
In addition, the statement said, the product comes in two variations: conditional and unconditional.
A conditional bond enables the beneficiary to collect the money nearly without any restrictions, but an unconditional bond allows the recipient to get the money almost immediately upon claim when certain requirements are satisfied.
Anand Pejawar, the full-time director of SBI General Insurance, said that this product was created in response to the government's ambition to upgrade infrastructure development.
By way of a Surety Bond, the Surety Insurance guarantees to the Project Owner that the Contractor will carry out the Project in accordance with the Agreed Terms and Conditions.
