Replaces the performance guarantee
Stands in for the cash or bank guarantee project owners require on contract signing, guaranteeing you'll complete the awarded works.
Performance Bond · PB-01
Guarantee contract completion without tying up capital
A performance bond guarantees you'll execute the awarded contract to its terms - replacing the cash guarantee project owners typically demand, so your capital keeps working.
0%
Cash margin for A+ credit profile
5–7 days
First-time issuance
0.5–3%
Annual premium
Up to 100%
Contract value can now be covered
At a glance
What this performance bond actually does
Up to 100% cover now available
IRDAI's May 2023 amendment removed the earlier 30% cap - performance bonds can now guarantee up to the full contract value.
Usually converts from your bid bond
Most bid bonds upgrade to a performance bond by amendment on contract award - no fresh underwriting in most cases.
How it works
The bond lifecycle
A clear path from the security requirement to release or claim.
Contract awarded
Your bid wins; the project owner calls for performance security within a set period.
Bond issued or converted
Assurety issues a fresh performance bond, or converts your existing bid bond by amendment.
Contract execution
The bond stays live through delivery, guaranteeing performance per the awarded terms.
Release or claim
Satisfactory completion: bond is released. Default: obligee can make a claim.
Released on completionThe real comparison
Performance Bond vs. bank guarantee
Look beyond headline commission to the capital impact, speed and effective cost.
| Metric | Performance Bond (Assurety) | Bank Guarantee |
|---|---|---|
| Cash blocked | 0% for A+ credit profile | ~100% of bond value, usually as FD |
| Headline cost | 0.5–3% p.a. premium | 0.25–0.75% p.a. commission |
| Effective cost | Premium only - no opportunity cost | 8–10% once blocked collateral is factored in |
| Guarantee cover | Up to 100% of contract value (since May 2023) | Up to 100%, but ties up equivalent cash |
| Regulatory standing | At par with bank guarantees - GFR Rule 171 (MoF OM, Feb 2022) | Traditional default instrument |
Cash blocked
Performance Bond (Assurety)
0% for A+ credit profile
Bank Guarantee
~100% of bond value, usually as FD
Headline cost
Performance Bond (Assurety)
0.5–3% p.a. premium
Bank Guarantee
0.25–0.75% p.a. commission
Effective cost
Performance Bond (Assurety)
Premium only - no opportunity cost
Bank Guarantee
8–10% once blocked collateral is factored in
Guarantee cover
Performance Bond (Assurety)
Up to 100% of contract value (since May 2023)
Bank Guarantee
Up to 100%, but ties up equivalent cash
Regulatory standing
Performance Bond (Assurety)
At par with bank guarantees - GFR Rule 171 (MoF OM, Feb 2022)
Bank Guarantee
Traditional default instrument
Bank guarantee commission looks cheap on paper - the real cost shows up in blocked collateral sitting idle instead of funding your next contract.
Why Assurety
Built for how the requirement actually moves.
Fast issuance
Straightforward conversion from an existing bid bond, or fresh issuance in 5–7 days.
Zero margin, qualifying credit
BBB+ and above often need no cash margin at all.
Contract-specific wording
Obligee name, project reference and validity matched exactly to your awarded contract.
Bid-to-performance conversion
No fresh underwriting for most bid bond conversions on contract award.
Full cover available
Up to 100% of contract value can be guaranteed since the 30% cap was lifted in May 2023.
Fair claims process
Valid claims are paid to the obligee and recovered from you under the right of subrogation - full underwriting up front keeps this the exception, not the norm.
Adoption
Accepted at meaningful scale.
3,300+
Surety bonds issued in India (industry estimate)
₹29,000 Cr+
Estimated value issued in India
₹10,000+ Cr
Issued via NHAI alone
GeM GTC 4.0
Recognized as Performance Security (v1.28, Dec 2025)
Government and private project owners can be obligees, subject to applicable procurement rules and contractual terms. We confirm the accepted format for each contract before issuance.
Industries
Where this bond gets used.
01
Construction
Execution guarantees on CPWD, PWD & municipal works contracts.
02Infrastructure
Multi-year NHAI & metro contracts requiring performance cover.
03Energy
EPC & grid contracts for PSUs and discoms.
04Manufacturing
Supply-and-installation contracts under PSU procurement.
05IT & Technology
GeM software & systems-integration contracts.
Eligibility
What you need to qualify.
Underwriting considers the business, its credit position and the underlying obligation.
Requirement 01
Entity type
Pvt Ltd, Public Ltd, LLP, partnership or proprietorship
Requirement 02
Credit check
Corporate CIBIL mandatory; rating drives terms
Requirement 03
Tenure
Bonds available up to 7 years
Requirement 04
Not a substitute for
Loan repayment or financial guarantees
Regulated placement
Bonds are arranged only through IRDAI-licensed insurers approved for surety business. The issuing insurer is confirmed before placement.
FAQ
Questions, answered.
Get a performance bond for your awarded contract
Tell us about your project and we'll have an indicative quote ready promptly.
