Incoterms and shipping
CIP (Carriage and Insurance Paid To)
Definition
Like CPT, with the seller also buying cargo insurance, at the all risks level of Institute Cargo Clauses (A) under Incoterms 2020.
CIP at a glance
- Transport
- Any mode
- Risk passes
- When the goods are handed to the first carrier, usually at origin
- Insurance
- Seller, broad all risks cover (Institute Cargo Clauses A) for 110 % of the contract value
CIP works like CPT: the seller pays carriage to the named destination and risk passes when the goods are handed to the first carrier. In addition, the seller must buy cargo insurance for the buyer's benefit.
Incoterms 2020 raised the minimum cover for CIP to Institute Cargo Clauses (A), which is all risks cover, for at least 110 percent of the contract value. CIF still only requires the more limited clauses (C).
Related terms
- CPT (Carriage Paid To)The seller pays carriage to the named destination, but risk passes when the goods are handed to the first carrier.
- CIF (Cost, Insurance and Freight)Like CFR, with the seller also buying minimum cargo insurance for the voyage.
- Incoterms 2020The ICC's eleven standard trade terms that set who pays for and bears the risk of each step of delivery.