A number of factors influence the rating of ships. The marine hull insurance business in India is detariffed and, hence, market-driven. The main factors that are taken into consideration in the underwriting and rating of hull risks are: Type and Physical Parameters of Vessels • Tanker, Dry cargo Vessel, Fishing Vessel, Dredger, etc. • Construction such as steel built, wooden construction, etc. • Age • Tonnage (GRT & DWT)/Engine power (BHP) • Method of Propulsion – single engine, double engine, dumb, etc. • Single bottom, double bottom, etc. SUM INSURED Indian Law permits Quarterly Installment facility to marine hull policies @ 25% of annual premium for time policies of minimum 12 month validity. Similarly, Builder’s risk policies are also eligible for installment facility, but only when the period of construction is 12 months or over and subject to the provisions of Premium Payment Regulations which, inter-alia, stipulates that the First installment should be 5% more than the rest. RATING Trade of the Vessel • Operation carried on – Fishing, Towing, Dredging, etc. • Nature of cargo carried – Dry/bulk, crude, acid, etc. • Trading Routes and Navigational Limits, weather condition, etc. Trading Warranty is introduced in the policy for insurance of ships clearly defining the geographical area in which the ship is permitted to navigate. In the absence of such warranty, the ship is at liberty to navigate anywhere worldwide increasing the risk exposure and degree of hazard. The Institute Warranty (IWL) dated 20.7.87 is normally used for all ocean-going ships. IWL breaches can be covered at additional premium paid in advance. Ownership • Fleet Characteristics, Size and Management • Fleet Claims Experience Classification: Seaworthiness, quality of maintenance, etc. Flag and Registry of the Vessel: Flag of Convenience (FOC) or not. Condition of Insurance: TLO or wider cover, P&I cover, etc. Sum Insured vis-à-vis Valuation of the Vessel. [2] GRT or Gross Registered Tonnage of a ship refers to the cubic capacity of all enclosed spaces. NRT or Net Registered Tonnage is the tonnage is obtained by deducting from the gross tonnage spaces for crew, ballast tank, chain space, workshop, etc. This parameter is used for rating cargo carrying ships. [3] BHP or Brake Horse Power refers to the power of the propulsion machinery and is used rating tugs.