CIF vs CIP (Incoterms 2020)
CIF is sea only and needs minimum ICC (C) cover. CIP works for any mode, including containers and air, and needs all-risks ICC (A) cover.
Side by side
| CIF · Cost, Insurance and Freight | CIP · Carriage and Insurance Paid To | |
|---|---|---|
| Transport Different | Sea and inland waterway | Any mode |
| Delivery and risk pass to the buyer Different | On board the ship at the port of shipment | Handed to the first carrier in the country of shipment |
| Main freight paid by | Seller | Seller |
| Insurance Different | Seller must insure: ICC (C), 110% of value | Seller must insure: ICC (A), 110% of value |
| Export clearance | Seller | Seller |
| Import clearance and duties | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Where risk and costs pass from the seller to the buyer
SellerBuyer
Origin → Main carriage → Destination. Simplified diagram: the exact point is the named place written after the rule. The costs line shows who pays the main carriage and, under DDP, the import duties and taxes.
Seller's obligations compared (A1–A10)
| CIF | CIP | |
|---|---|---|
| A1/B1 General obligations | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. |
| A2/B2 Delivery and taking delivery | Deliver by placing the goods on board the ship at the port of shipment, or procure goods so delivered. | Deliver by handing the goods over to the carrier the seller has contracted, at the agreed point at the place of delivery, or procure goods so delivered. |
| A3/B3 Transfer of risks | Bears all risk until the goods are on board. | Bears all risk until the goods are handed to the first carrier. |
| A4/B4 Carriage | Contract or procure carriage on usual terms, by the usual route, in a ship of the type normally used, from the port of shipment to the named port of destination; meet transport-related security requirements. | Contract or procure carriage on usual terms, by a usual route and in the customary manner, from the place of delivery to the named place of destination; meet transport-related security requirements. |
| A5/B5 Insurance | Buy cargo insurance at its own cost covering at least Institute Cargo Clauses (C), for at least 110% of the contract price in the contract currency, from delivery to at least the named port of destination, and give the buyer the policy or certificate. At the buyer's request and cost, add wider cover such as Clauses (A) or (B), war or strikes cover, if available. | Buy cargo insurance at its own cost covering at least Institute Cargo Clauses (A), all risks, for at least 110% of the contract price in the contract currency, from delivery to at least the named place of destination, and give the buyer the policy or certificate. Add war or strikes cover at the buyer's request and cost, if available. |
| A6/B6 Delivery or transport document | Provide, at its cost, the usual transport document to the agreed port of destination. It must cover the goods, be dated within the shipment period, let the buyer claim the goods at destination and, unless agreed otherwise, sell them in transit; a negotiable bill of lading goes to the buyer as a full set of originals. | If customary or requested, provide at its cost the usual transport document for the agreed carriage. Where agreed or customary, it must let the buyer claim the goods at destination and sell them in transit; a negotiable document in several originals goes to the buyer as a full set. |
| A9/B9 Allocation of costs | Pay all costs until the goods are on board, the loading and sea freight, the insurance premium, any unloading at the port of discharge and transit costs that the carriage contract puts on the seller, the transport document and export clearance. | Pay all costs until delivery, the freight, the insurance premium, any unloading and transit costs that the carriage contract puts on the seller, the transport document and export clearance. |
When to use each rule
CIF
CIF is common for commodities and for sales paid by letter of credit, where the bank wants to see an insurance document. It is for sea and inland waterway only; for containers the ICC recommends CIP.
CIP
CIP suits manufactured goods sent by container, air or courier when the buyer wants insured delivery. It is the any-mode version of CIF, but with a higher level of insurance.
Compare other rules
A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.
Guides on this topic
Common questions
What insurance does CIF require?
Cargo insurance on at least Institute Cargo Clauses (C) terms for 110% of the contract value, in the contract currency, covering the goods from delivery to at least the port of destination.
What insurance does CIP require?
Cargo insurance on Institute Cargo Clauses (A) terms, the all-risks level, for at least 110% of the contract value, in the contract currency, from delivery to at least the named destination.
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