New India Assurance becomes second company to offer suretyships
Bonds are legally enforceable tripartite contracts that guarantee compliance, payment and/or performance.
The issuing insurer provides a guarantee against a premium in the event of a delay in the execution of a project. It assures one party (creditor) that the entity responsible for the project or performance (client) will complete the project on time in compliance with the prescribed provisions.
The client is also assured that the guarantor will take responsibility for timely payments. If the client defaults on the service, the deposit insurer pays the creditor compensation.
Neerja Kapur, Chair and Chief Executive of New India Assurance Co, said: “Assurance guarantees will revolutionize the dynamics of the infrastructure industry in the long term. Bond insurance will act as a security shield for infrastructure projects, protecting the interests of both contractors and principals… Our sureties provide much-needed financial security to all parties involved in infrastructure projects.”
Last December, Union Highways Minister Nitin Gadkari issued the country’s first surety bond for infrastructure projects with private sector actor Bajaj Allianz.
At the launch of the bonds, Gadkari said guarantee bonds could increase both the availability of liquidity and the capacity of infrastructure players.
The deposit insurance acts as a security arrangement for infrastructure projects and will insulate both the contractor and the principal, the minister had said, adding that the product would also meet the needs of a diversified group of contractors, many of whom operate in an increasingly volatile environment Surroundings.
https://www.zeebiz.com/companies/news-new-india-assurance-becomes-second-company-to-offer-surety-bonds-224556 New India Assurance becomes second company to offer suretyships