CPT vs CIP (Incoterms 2020)
They are identical except that under CIP the seller must also buy insurance for the buyer's benefit, with all-risks ICC (A) cover. Choose CIP when the buyer expects insured goods, or when a letter of credit requires an insurance document.
Side by side
| CPT · Carriage Paid To | CIP · Carriage and Insurance Paid To | |
|---|---|---|
| Transport | Any mode | Any mode |
| Delivery and risk pass to the buyer | Handed to the first carrier in the country of shipment | Handed to the first carrier in the country of shipment |
| Main freight paid by | Seller | Seller |
| Insurance Different | Not required | 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)
| CPT | 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. |
| A3/B3 Transfer of risks | Bears all risk until the goods are handed to the first carrier, even though it pays freight to destination. | Bears all risk until the goods are handed to the first carrier. |
| A5/B5 Insurance | No obligation to insure. At the buyer's request, risk and cost, give the information the buyer needs to buy insurance. | 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. |
| A9/B9 Allocation of costs | Pay all costs until delivery, the freight and other costs of the carriage contract including loading, any unloading 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
CPT
CPT suits containers, air freight and multimodal transport when the seller can get good freight rates but does not want to carry transit risk. It is the any-mode version of CFR.
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
Where does risk pass under CPT?
When the seller hands the goods to the first carrier in the country of shipment, not at the destination named in the rule.
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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