Trade & Incoterms
CIP (Carriage and Insurance Paid To)
An Incoterm for any transport mode where the seller pays carriage to the named destination and must provide all-risks cargo insurance for the buyer. Risk transfers at handover to the first carrier.
In depth
CIP is CPT plus insurance, and Incoterms 2020 made an important change to it. The seller must now insure to Institute Cargo Clauses (A) — all-risks cover — where the previous edition required only the restricted Clauses (C). That makes CIP materially more protective than CIF, which still sits at the Clauses (C) floor. Cover must run to the named destination and be for at least 110 percent of the contract value. As with CPT, risk passes to the buyer at handover to the first carrier, so the insurance is protecting the buyer's risk for most of the journey.
Key points
- Any transport mode; CPT plus a mandatory insurance obligation
- Incoterms 2020 raised the floor to all-risks Clauses (A)
- Cover must be at least 110 percent of contract value
- More protective than CIF, which remains at Clauses (C)