CIP: Carriage and Insurance Paid To (Incoterms® 2020)

CIP works like CPT, with one addition: the seller must insure the goods for the buyer's benefit, with all-risks cover for at least 110% of the contract value.

Quick facts

TransportAny mode

Delivery and risk pass to the buyerHanded to the first carrier in the country of shipment

Main freight paid bySeller

InsuranceSeller must insure: ICC (A), 110% of value

Export clearanceSeller

Import clearance and dutiesBuyer

Unloading at destinationBuyer

How to write it

CIP + the named place of destination + Incoterms 2020, for example: CIP Nairobi Incoterms 2020.

What the seller does

Clears the goods for export.
Contracts and pays for carriage to the named destination.
Buys cargo insurance on ICC (A) terms for at least 110% of the contract value, in the contract currency, covering at least to the destination.
Gives the buyer the transport document and the insurance policy or certificate.

What the buyer does

Takes the risk from the handover to the first carrier, protected by the seller's insurance.
Claims directly from the insurer if goods are lost or damaged.
Pays unloading at destination unless the carriage contract includes it.
Clears the goods for import and pays duties and taxes.

When to use it

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.

Common mistakes

Buying ICC (C) cover out of habit. Since 2020, CIP requires all-risks ICC (A) unless the contract says otherwise.
Insurance that stops at the port instead of reaching the named destination.
Forgetting to send the insurance certificate, which letters of credit often require.

CIP vs CIF

CIF is for sea and inland waterway only and needs just minimum ICC (C) cover. CIP works for any mode and needs all-risks ICC (A) cover. For containers, CIP is the better fit.

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.

All 11 Incoterms 2020 rules

Common questions

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.

Who can claim on the insurance under CIP?

The buyer. The seller buys the policy, but it must allow the buyer, or anyone with an insurable interest, to claim directly from the insurer.