Trade & Incoterms
CIF (Cost, Insurance and Freight)
An Incoterm where the seller pays for cost, insurance, and freight to the named port of destination. Risk transfers when goods are on board at the port of shipment. The seller must procure minimum marine insurance for the buyer.
In depth
CIF is CFR plus a minimum insurance obligation. The seller contracts and pays for ocean carriage to the named port of destination and must also procure marine cargo insurance for the buyer's benefit. As with CFR, risk transfers when the goods are on board at the port of shipment, so the buyer bears the risk of a voyage the seller arranged. Incoterms 2020 kept CIF's insurance floor at Institute Cargo Clauses (C), a restricted named-perils cover — noticeably narrower than the all-risks Clauses (A) that CIP now requires. Buyers who want broader protection must negotiate it expressly or arrange their own top-up policy.
Key points
- Seller pays freight and provides marine insurance to destination
- Risk still passes at origin, on loading
- Minimum cover is Institute Cargo Clauses (C) — restricted, not all-risks
- Sea and inland waterway only; CIP is the any-mode equivalent