ovrseasCIP: Carriage and Insurance Paid To
C-group rule · any mode of transport · Incoterms® 2020
CIP (Carriage and Insurance Paid To) means the seller pays the carriage to the named place of destination and buys cargo insurance for the buyer, by any mode of transport. Risk passes to the buyer when the goods are handed to the first carrier.
- Risk passes
- When the goods are handed to the first carrier — same as CPT.
- Main freight
- Paid by the seller
- Insurance
- The seller buys broad (A) cover for the buyer
- Customs
- Export: Seller · Import: Buyer
Who pays what under CIP
| Export clearance | Seller |
|---|---|
| Carriage to port / terminal | Seller |
| Loading onto main carriage | Seller |
| Main carriage (freight) | Seller |
| Insurance | Seller |
| Unloading at destination | Buyer Unless unloading is included in the seller’s carriage contract (liner terms, door-to-door rates) — then the seller pays it and cannot charge it on. |
| Import clearance | Buyer |
| Duties and import taxes | Buyer |
How to write CIP on your documents
The rule is only complete with its named place. The place of destination the seller pays carriage and insurance to.
CIP Frankfurt Airport, Germany — Incoterms® 2020
Write it the same way on the quotation, the proforma, the commercial invoice and the shipping instructions — a different place on one document is a different deal.
Use CIP when
- Containers, air or multimodal shipments where the buyer wants the seller to arrange freight and insurance.
- Letters of credit that call for an insurance document with any mode of transport.
Think twice when
- Contracts copied from before 2020 that assume CIP cover equals CIF cover — it no longer does.
- The seller cannot buy (A) cover for the goods at a sensible price — agree a lower cover in the contract.
The 2020 revision raised CIP cover above CIF’s. Contracts copied from pre-2020 templates often still assume they match.
Questions about CIP
- What does CIP mean in shipping?
- CIP (Carriage and Insurance Paid To) means the seller pays the carriage to the named place of destination and buys cargo insurance for the buyer, by any mode of transport. Risk passes to the buyer when the goods are handed to the first carrier.
- Where does risk pass under CIP?
- When the goods are handed to the first carrier — same as CPT.
- Who pays the freight under CIP?
- The seller pays the main carriage — even though risk has already passed to the buyer at origin.
- Who pays import duties under CIP?
- The buyer. Import clearance, duties and taxes are the buyer’s under every rule except DDP.
- Can CIP be used for containers or air freight?
- Yes. CIP works for any mode of transport, including containers, air, road and rail.
- What insurance does the seller have to buy under CIP?
- Since Incoterms 2020, the broad cover — Institute Cargo Clauses (A) or similar — for at least 110% of the contract price, in the contract currency. The parties may agree a lower level in the contract. (A) is broad, not unlimited: war and strikes, for example, need their own clauses. Under CIF the minimum (C) cover is still the default.
The documents where CIP is written
- Commercial invoice template
Customs and the buyer’s bank read the Incoterm here; it decides which costs belong in the invoice value.
- Proforma invoice template
The buyer opens a letter of credit or pays a deposit on these terms — the same rule must follow through.
- Quotation template
A price means nothing without its rule: «USD 12.50 FOB Busan» and «USD 12.50 DAP Dallas» are different offers.
Compare CIP with
Incoterms® is a registered trademark of the International Chamber of Commerce. This page is an independent summary of how costs and risk are allocated and is not affiliated with or endorsed by ICC. For contract drafting, use the official Incoterms® 2020 rules published by ICC.