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SBI General Insurance, the non-life insurance arm of State Bank of India (SBI), on Tuesday announced the launch of the General Surety Bond Bima (Conditional & Unconditional)' insurance product.
Surety Bond Insurance will act as a security arrangement for infrastructure projects and will insulate the contractor as well as the principal (contract awarding authority).
The product is designed to provide protection against breach of terms and conditions by the contractors either during the bidding stage or during the performance stage of a project, SBI General said in a statement.
The Surety insurance product consists of a wide range of bonds, such as bid bonds, advance payment bond, performance bond, and retention money bond, it said.
The product caters to the requirements of a diversified group of contractors, many of whom are operating in today's increasingly volatile environment, he said while launching the product.
Additionally, the statement said, there are two variants available in the product i.e. conditional and unconditional.
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In a conditional bond, a specified sum is paid to the beneficiary upon claim when specific conditions are met, while an unconditional bond allows the beneficiary to claim the money almost without any conditions.
This product was developed in response to the government's vision to upscale infrastructure development, SBI General Insurance, whole-time director Anand Pejawar said.
The Surety insurance provides an assurance to the project owner in the form of a Surety Bond that the contractor would complete the project as per the agreed terms and conditions.
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