CIP, or Carriage and Insurance Paid To, is an Incoterms rule under which the seller delivers the goods to the first carrier, pays carriage to the named destination and obtains specified cargo insurance for the buyer. Risk transfers at delivery to the first carrier, not at destination.
What does the seller handle?
The seller packages the goods, completes export clearance, hands them to the contracted carrier, pays transport to the named place and obtains insurance meeting the Incoterms 2020 CIP requirement unless the contract varies it.
What does the buyer handle?
The buyer bears transit risk after the first-carrier handoff, completes import clearance and pays duties, taxes and costs not included in the seller’s carriage contract.
Why is the named place important?
It identifies how far the seller pays carriage. The contract should state an exact terminal, address or point because destination handling and onward movement can otherwise be disputed.
How does CIP affect landed cost?
Add the CIP price to buyer-paid import duty, tax, brokerage, destination charges and inland delivery not included in the seller’s contract. Check the insurance value, exclusions and claims process rather than assuming all loss is covered.
CIP versus CIF
CIP can be used for any transport mode and transfers risk at the first carrier. CIF is for sea and inland-waterway transport and transfers risk when goods are on board the vessel.
