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Carriage and Insurance Paid To (CIP)

What is Carriage and Insurance Paid To (CIP)?

An Incoterms® rule, applicable to any form or forms of transport (air, ocean, ground, or multimodal), that mirrors CPT, but that also requires the seller to arrange and pay for extensive insurance cover against the buyer’s risk of loss of or damage to the goods from the port of shipment to at least as far as the port of destination. This may cause problems where the destination country requires insurance cover to be purchased locally, in which case, the parties should consider selling and buying under CPT. When using CIP, the seller and buyer may agree on a lower level of insurance cover to be provided as part of their agreement.


Note:

When an Incoterms® rule is included in a contract of sale, it creates legal obligations for the buyer and seller, which can have costly implications. Therefore, it is important that traders read and understand the precise wording of the Incoterms® rules carefully and choose the rule to include in their sale contract thoughtfully. For additional information and resources on the Incoterms® rules, and to purchase the full text of the Incoterms® 2020 rules, visit the ICC website.


Related Terms

Cargo Insurance Carriage Paid To (CPT) Consignee Consignor Incoterms


Related FAQs


Why are Incoterms rules necessary?

How many Incoterms rules are there?

What do Incoterms rules cover?

What don't Incoterms rules cover?

What can I do right now to help my business with Incoterms rules?

How do Incoterms rules affect my shipment?

How can I protect myself from risk using Incoterms rules?

Are Incoterms rules a complete contract of sale?

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