An insurer-backed promise that secures your bid obligation.
For EMD, it can provide the required bid security without using your sanctioned bank guarantee limit, wherever the tender permits it.
A guarantee instrument, not a loan.
Surety Bond is now available as an EMD option on GeM
Bid on GeM without tying up your BG limit.
Use an insurer-issued Surety Bond for eligible EMD requirements, so your existing banking capacity remains available for upcoming bids, project execution and other business needs.
A different way to secure your bid
What is an Insurance Surety Bond?
Issued by licensed general insurers
Recognised for eligible GeM bid security
Subject to underwriting and tender terms
01
Your business
Applies for the bond and remains responsible for the bid obligation.
Principal
02
General insurer
Underwrites your business and issues the guarantee.
Surety
03
Buyer or GeM authority
Receives the security required under the tender.
Beneficiary
Why sellers use it
Benefits of Insurance Surety Bonds
Preserve BG capacity
Your sanctioned bank guarantee line remains available for other requirements.
Keep liquidity available
Avoid tying the guarantee value to a banking facility for every eligible EMD.
Bid with more headroom
Support multiple opportunities without relying only on one guarantee line.
Follow a digital process
Share bid details, complete underwriting and receive the issued bond.
Surety Bond vs Bank Guarantee
Key difference
Bank Guarantee
Insurance Surety Bond
Issuer
Bank
Leading InsurersIFFCO Tokio, Future Generali, United India, National, Oriental and more
Banking capacity
Uses your BG limitCapacity stays occupied until release
Does not use your BG limitA separate insurer-backed route
Collateral
Cash margin or FDFunds stay blocked until released
None requiredWorking capital stays free
Commercial terms
Commission and bank chargesMargin or security may apply
Insurance premiumBased on insurer underwriting
Pricing, eligibility, margin requirements and processing time vary by provider, applicant and tender.
The GeM application journey
How to Apply Your EMD on GeM
Video walkthrough
See the full GeM EMD journey.
Where to find the surety option, what details to keep ready and how to submit the issued bond.
Press play to load the film
Watch on YouTube
01
Check the bid requirement
Confirm the EMD amount, validity, format and whether surety is listed as an accepted mode.
02
Share business and bid details
Provide the tender documents, entity information and financials needed for underwriting.
03
Complete insurer underwriting
The insurer reviews eligibility and shares the commercial terms for the bond.
04
Pay the premium and receive the bond
Review the final wording and collect the issued bond in the required format.
05
Submit it on GeM
Upload or provide the bond exactly as the tender instructs and retain the acknowledgement.
See the impact
Understand the cost of each bid
Illustration only. This is not a premium quote or an approval. Eligibility, pricing and terms are determined by the insurer.
The credibility behind Insurance Surety Bonds
Recognised for public procurement. Issued by IRDAI-regulated insurers.
Feb 2022 · GFR / OM (per GFR 2017)
General Financial Rules amendment
The foundational amendment to the General Financial Rules (based on GFR 2017) that enables surety bonds as an accepted instrument.
Access document GFR 2017 (updated 31 Jul 2024)DoE Office Memorandum, 2 Feb 2022
Document to be added.
Select a milestone to read what it changed and open the document behind it.
The growing acceptance of Insurance Surety Bonds
Accepted on GeM and by 300+ government departments.
Sep 2022 · GeM / GIC
Surety bonds go live on GeM
The surety bond option is introduced on GeM with GIC as the insurer, the starting point for surety bonds as bid security.
Access document Related documentGeM General Terms & Conditions, May 2024
Document to be added.
More than 300 Central and State government departments accept an Insurance Surety Bond. 242 of them are named, department by department, on the full list.Download the list (PDF)
Important:Acceptance depends on the security clause of each tender, so always confirm the permitted instruments before applying.
Common questions
Frequently asked questions
Is an Insurance Surety Bond accepted on GeM the same way a bank guarantee is?
Yes, wherever the tender's own security clause permits it. The bid document, not this page, decides the exact format and validity a specific tender will accept.
Does a surety bond require any collateral or margin money?
You do not need collateral for an Insurance Surety Bond. Depending on the insurer's risk assessment of your business, the insurer may ask you to create a lien FD or deposit margin money, which would be a percentage of the EMD value.
What happens if I do not win the bid?
The bond simply expires at the end of its validity period. There is no refund process to chase, because no capital was blocked in the first place.
What happens if I win the bid and then do not proceed?
The buyer can invoke the bond, and the insurer pays out the bid security amount. The insurer then recovers that amount from you under the indemnity signed at issuance. The obligation is the same one a cash EMD would have carried.
Is this only for bid security (EMD), or also for performance security?
Both. Insurance Surety Bonds are accepted for performance, advance payment and retention money as well, subject to what the specific contract permits.
How long does it take to get a bond issued?
It depends on the insurer's underwriting and how complete your application is. Applications missing a document take as long as that document takes to arrive.
What is the 'Surety Bond' and 'Apply for Bond' button on the bid participation page?
GeM now allows sellers to submit an Insurance Surety Bond as EMD. When you click 'Apply for Bond', GeM takes you to the application page for an Insurance Surety Bond. There you can learn more about the Insurance Surety Bond and check your eligibility and how to apply.
What is an Insurance Surety Bond?
An Insurance Surety Bond is issued by an IRDAI-registered insurance company and can be submitted as the Earnest Money Deposit (EMD) on a tender. It is a collateral-free alternative to a bank guarantee. It assures the buyer (beneficiary) that you, the seller, will fulfil your bid obligations, and it does not require you to pledge collateral, lock up cash or use your bank fund limits.
Why do I need an Insurance Surety Bond?
Some tenders on GeM require the seller to provide an Earnest Money Deposit (EMD) as bid or performance security, for which sellers usually procure a bank guarantee from their bank. Instead of blocking cash with a bank to get a bank guarantee, the seller can opt for an Insurance Surety Bond.
How is an Insurance Surety Bond different from a bank guarantee?
A bank guarantee is a promise to the buyer from the bank, backed by the seller's capital. An Insurance Surety Bond is a guarantee issued to the buyer by an insurance company without blocking your cash or bank limits, backed by their assessment of your business performance and financials. Banks charge a commission to issue a bank guarantee. Insurance companies charge an insurance premium to issue an Insurance Surety Bond.
How do I know if a tender is accepting Insurance Surety Bonds?
If the tender accepts an Insurance Surety Bond as EMD, it is specified in the EMD section of the tender document.
Who can apply for an Insurance Surety Bond?
Subject to the insurer's terms and conditions, any business with at least 3 years of operational track record, financial stability and relevant project experience may be eligible. All kinds of businesses can apply: public limited, private limited, partnership firms, LLPs and proprietorships.
How do I apply for an Insurance Surety Bond?
When you reach the EMD or ePBG section in the bid participation journey, you will see two options for submitting EMD: 'In Form of Surety Bond' and 'In Form of Bank Guarantee'. Choose 'In Form of Surety Bond', then select 'Online' as the mode. You can then learn more, or click 'Apply for Bond' to begin. GeM first takes your consent to share your bid details with the application page. Tick the consent and click 'Proceed', then consent to being redirected to the application page. On the application page, your KYC and bid information is pre-filled. Validate it and confirm through an OTP. You are then guided on the next steps. Once the bond is uploaded on GeM, you can complete the rest of the tender process and track status updates on GeM.
What information does the insurance company need to consider an application?
In most cases the insurer asks for: Company and director, proprietor or partner details Audited financials for the previous 3 financial years Certified financials for the current financial year A credit rating report from a certified external agency, if available A credit bureau report (CIBIL, CRIF, Experian, Equifax) for the company, proprietor or partner Business GST filing details (optional) This list is indicative. Insurers may ask for more depending on the applicant.
How will the Insurance Surety Bond be issued to me?
Like a bank guarantee, the Insurance Surety Bond is issued by the insurance company and shared with you by email. If you avail it through the 'Apply for Bond' button, the bond document is uploaded directly to your tender bid on GeM.
How much premium do insurers charge?
The premium varies case to case. Depending on the insurer's risk assessment, it may fall in a broad range of about 0.5% to 5% per year of the bond value. Some insurers have a minimum premium clause regardless of the risk percentage. Over and above the premium, the seller bears the stamp duty and nominal processing fees for the indemnity agreement and bond issuance.
Can I cancel the Insurance Surety Bond, and how?
A bond, once issued, can be cancelled only if the tender is cancelled by the beneficiary, who must issue a letter citing the reasons. Stamp duty once paid is not refunded. The premium is refunded subject to each insurer's cancellation and refund guidelines. If you withdraw from the bid, the bond becomes void and the premium is not refunded.
What if the bond needs to be amended?
For a Bid Bond, if it must be amended before the bid closure date, the beneficiary issues a corrigendum, which the seller submits to the insurer. In all other cases, an amendment can be applied for only with a valid notification from the beneficiary that validates the purpose.
How will the beneficiary or buyer claim the guarantee?
The beneficiary can claim against the bond by contacting the insurance company. The details and process to invoke the bond are mentioned on the document issued by the insurer.
Whom do I contact for further queries?
For any further queries on the Insurance Surety Bond, use the Contact us form and our team will get back to you. You can also track application status on the EMD tab on the tender page.
Is my data safe?
Yes. Your information is used only to give you relevant information and assess your eligibility. Data is transferred via secure, encrypted APIs, the same standard used by banking and financial platforms. The application platform maintains ISO 27001 aligned information security practices. All data is stored on India-resident infrastructure with AES-256 encryption at rest and TLS encryption in transit. It follows industry best practices including role-based access controls, periodic vulnerability assessments and audit logging.
Your next GeM bid does not have to consume your BG limit.
Understand the requirement, check eligibility and choose the guarantee route that protects your financial headroom.