CIPCarriage and Insurance Paid To
CIP (Carriage and Insurance Paid To) means the seller pays carriage to the named destination and buys cargo insurance for the buyer at Institute Cargo Clauses (A) level for 110 % of the contract value, but risk passes when the goods are handed to the first carrier. It works for any mode.
Where CIP hands over
The orange marker is where risk passes to the buyer. Blue bars are the seller's, yellow the buyer's.
CIP at a glance
- Transport
- Any modeIncluding containers and multimodal
- Risk passes
- Handed to carrier
- Main carriage
- Seller paysand arranges the contract
- Insurance
- Seller, ICC (A)110 % of the contract value
- Delivery point
- When the goods are handed over to the first carrier, with carriage and ICC (A) insurance paid by the seller to the named destination.
| Job | Who |
|---|---|
| Export clearance | Seller |
| Loading at origin | Seller |
| Main carriage | Seller |
| Insurance | Seller, ICC (A) |
| Unloading at destination | Buyer, unless in seller's freight contract |
| Import clearance and duties | Buyer |
When to use CIP
Use CIP when
- Containers or air freight with freight and insurance arranged by the seller
- A letter of credit needs an insurance document
- Valuable manufactured goods that need ICC (A) cover
Avoid CIP when
- The buyer already has an open-cover policy
- Old templates still assume ICC (C) cover
- The cost of ICC (A) cover was not priced in
Common CIP mistakes
Under Incoterms 2010 CIP needed only ICC (C). Incoterms 2020 raised it to ICC (A). Check old contract templates and insurance certificates.
The policy must cover at least 110 % of the contract price, in the contract currency, and allow the buyer to claim directly.
As with CPT, the buyer takes the risk from the first carrier; the policy is what protects it.
CIP beside its neighbours
CIF is the sea-only version, with the narrower ICC (C) minimum cover. Read about CIF.
All eleven rules
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). CartonMath is not affiliated with or endorsed by the ICC. This is a plain-language summary; the full rules are published by the ICC and the contract wording governs.
Common questions
What does CIP mean?
CIP (Carriage and Insurance Paid To) means the seller pays carriage to the named destination and buys cargo insurance for the buyer at Institute Cargo Clauses (A) level for 110 % of the contract value, but risk passes when the goods are handed to the first carrier. It works for any mode.
When does risk pass under CIP?
When the goods are handed over to the first carrier, with carriage and ICC (A) insurance paid by the seller to the named destination.
Who pays the main freight under CIP?
The seller arranges and pays the main carriage.
Who pays import duties under CIP?
The buyer clears the goods for import and pays any duties and taxes under CIP.
Can CIP be used for container shipments?
Yes. CIP works for any mode of transport, including containers and multimodal shipments.