Over Rs 10,000 crore of Insurance Surety Bonds issued for NHAI contracts

Insurance companies have issued over Rs 10,000 crore of Insurance Surety Bonds (ISB) for contracts of the National Highways Authority of India (NHAI) under the ministry of road transport and highways.

“Till July 2025, 12 insurance companies have issued around 1,600 ISBs as bid security and 207 ISBs as performance security valued at around Rs 10,369 crores for NHAI contracts,” the road ministry said in a statement issued on Thursday.

Insurance Surety Bonds are instruments where insurance companies act as ‘surety’ and provide the financial guarantee that the contractor will fulfil its obligation as per the agreed terms.


NHAI has been encouraging the use of Insurance Surety Bonds as an additional mode of submitting bid security or performance security deposit.

The ministry of finance has made e-BG and Insurance Surety Bonds at par with BGs for all government procurements. The Insurance Surety Bonds, when issued, would be cost effective and provide adequate security for NHAI projects, the ministry said.

The ministry is of the view that as India is poised to become the world’s third largest construction market, the requirement of bank guarantees in the Indian infrastructure Sector is expected to grow by 6% to 8% year-on-year basis.

Surety bonds act as a viable alternative to bank guarantees. ISB are cost-effective and could provide substantial relief for the infrastructure sector, it added.

NHAI on Thursday organised a workshop to further promote wider adoption of Insurance Surety Bonds (ISB) and Electronic Bank Guarantee (eBG).