A contractual risk‑mitigation solution that provides financial guarantees for performance of contractual obligations.
Financial guarantee for contractual performance
Alternative to traditional bank guarantees
Kshema Surety Bond Insurance is structured to safeguard business & project owners against losses arising from a contractor’s failure to comply with agreed contractual obligations, whether at the bidding phase or during project execution.
Kshema offers 4 types of Bonds
Benefits of Kshema’s Surety Bond:
Financial ProtectionEnhances CredibilitySupports Regulatory ComplianceReduces Financial ExposureMaintains LiquidityFacilitates Business GrowthPromotes Accountability
Three key entities that form the foundation of every surety bond and insurance arrangement
Insured. The entity responsible for performing contractual obligations under the project or agreement.
Obligee / Beneficiary. The party (government body, PSU, or private entity) in whose favour the surety bond insurance is issued.
Kshema General Insurance Limited. The insurer providing a financial guarantee and compensating the Creditor in case of default by the Principal Debtor, as per policy terms.
Risk Protection
A guarantee the bidder will honour the bid and execute the contract at the quoted price, if selected.
A guarantee the advance made to a contractor will be used for the project and recovered if contractual obligations are not met.
A guarantee the contractor will complete the project in accordance with the contractual terms and specifications.
A guarantee that replaces retained cash, assuring the project owner that contractual obligations will be fulfilled during the defect-liability period.
Based on the contractor's financial strength, experience & past performance
Contractor (Principal Debtor) signs a Deed of Indemnity with Kshema.
Kshema General Insurance issues the Surety Bond to the Creditor.
If the contractor defaults, the Creditor makes a written demand to Kshema, providing required documents.
Kshema evaluates the claim and gives the contractor a chance to rectify or pay (as per policy timelines).
If the contractor still fails, Kshema pays the Creditor up to the Bond Value.
The contractor is legally required to reimburse Kshema afterwards.
The Creditor must return the original Bond after settlement.
Comprehensive protection for your property and assets against fire and allied perils.
Reliable surety bond insurance solutions designed to strengthen contractual assurance and financial security
Provides a financial guarantee to protect the Beneficiary against default or non‑performance of contractual obligations
Reduces financial risk by offering assurance under surety bond and insurance arrangements without blocking working capital
Strengthens trust by demonstrating financial strength and compliance when bidding for projects or contracts
Learn the Basics
Compare the key differences between Surety Bond and Bank Guarantee to choose the best coverage for your farming needs.
| Aspect | Surety Insurance (Surety Bond) | Bank Guarantee |
|---|---|---|
| Nature of Instrument | Risk transfer and performance assurance tool | Financial security instrument |
| Parties Involved | Three parties: Principal (Contractor), Obligee (Project Owner), and Surety (Insurer) | Two primary parties: Applicant (Contractor) and Beneficiary (Project Owner) |
| Primary Purpose | Guarantees completion of contractual obligations | Guarantees payment of a specified amount |
| Focus of Evaluation | Surety evaluates contractor’s technical, financial, and performance capability | Bank primarily evaluates availability of collateral or credit limits |
| Interest in Project Performance | Surety has a direct interest in successful project completion | Bank has no active interest in project execution |
| Risk Assessment | Based on contractor’s ability to perform the contract | Based on collateral and financial security provided |
| Claim Settlement | Claim is paid after validating default and contractual breach | Typically, an on‑demand instrument; paid upon beneficiary’s request |
| Recovery Rights | Surety retains the right to recover paid claims from the contractor | Bank recovers payment through pledged collateral |
| Impact on Contractor’s Liquidity | Minimal impact on cash flow and working capital | Blocks cash or credit limits, affecting liquidity |
| Dispute Consideration | Claims are subject to investigation and contractual terms | Paid regardless of disputes between parties |
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Documentation Guide
Documents vary based on the type of claim you're filing
Claim FormPolicy / Insurance CertificateDriving LicenseRCPUC Certificate
Repair BillsRepair EstimateFIR (if major)
Original KeysFIR CopyUntraced ReportCourt DocumentsFIR (Mandatory)You can apply through Kshema app from your registered mobile number.
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