Carriage and Insurance Paid To (CIP)
Definition: What is CIP?
The Incoterm CIP, also known as “Carriage and Insurance Paid to”, is an Incoterm that plays an important role in international trade. It regulates the responsibilities and costs between the seller and the buyer in a transparent manner. Under the CIP terms, the seller is obliged to deliver the goods to the named place of destination and take care of the transportation and insurance of the goods up to that point. Once the goods have arrived at their destination, the buyer assumes responsibility.
Seller’s responsibilities under CIP:
- Deliver goods to the first carrier and pay for freight to the final destination
- Arrange and pay for comprehensive insurance coverage during transit
- Handle export customs clearance and related formalities
- Package goods appropriately for international transport and shipping requirements
- Provide insurance coverage equivalent to Institute Cargo Clauses (A) – “All Risks” coverage
Buyer’s responsibilities under CIP:
- Bear the risk after the first carrier takes possession of the goods
- Handle import customs clearance and local delivery from the destination
- Take delivery at the named destination and arrange onward transport if needed
- Cover any additional insurance costs if higher coverage than ICC(A) is required
When to use CIP
CIP is ideal for multimodal transport where the seller can manage shipping logistics and wants to provide comprehensive insurance coverage for the buyer. It offers flexibility across all transport types, from air freight to road, rail, or sea transport. “Carriage and Insurance Paid To” is particularly suitable when buyers want maximum insurance protection arranged by the seller.
Important considerations for CIP:
- CIP requires seller to provide “All Risks” insurance coverage (Institute Cargo Clauses A) – higher than other Incoterms
- Insurance must cover at least 110% of the goods’ value in the contract currency
- Suitable for all modes of transport including containerized goods and multimodal shipments
- Risk transfers to buyer when goods are handed to first carrier, not at final destination
- Insurance coverage continues until goods reach the named destination
- Parties can negotiate different insurance levels, but ICC(A) is the minimum requirement
How time:matters supports CIP shipments
With time:matters, sellers gain peace of mind knowing shipments are in expert hands with comprehensive insurance coverage up to the final destination. Our express network, real-time tracking, and ability to intervene in-transit help ensure smooth delivery while maintaining full insurance protection throughout the journey.