Carriage and Insurance Paid To (CIP)

Carriage and Insurance Paid To (CIP) is the Incoterms 2020 rule under which the seller pays carriage and cargo insurance to a named destination, but delivers the goods, and passes the risk to the buyer, when it hands them to the first carrier at origin. The seller clears export; the buyer clears import and pays the duty. CIP works for any mode of transport and is the multimodal counterpart of CIF.

The insurance the seller must buy

• Level: cover complying with Institute Cargo Clauses (A), the all-risks grade, or similar clauses. This was one of the key changes in Incoterms 2020, which raised CIP to this level while leaving CIF at the (C) minimum
• Amount: at least 110% of the contract price
• Beneficiary: the policy or certificate is issued in favor of the buyer, or another party with an insurable interest in the goods, so the buyer can claim on it
• Duration: the cover runs to the named destination. Anything beyond that, or broader than the default, has to be written into the sales contract or bought yourself

Risk still passes at origin

As with every C rule, the destination named in the term is where the seller's payments end, not where its responsibility for the goods ends. "CIP Atlanta" with delivery to the airline at Chennai means the buyer owns the risk from Chennai; the policy the seller bought is what protects it. Name the place of delivery as well as the destination in the contract so there is no argument about where risk moved.

CIP vs CIF

• Mode: CIF is for sea and inland waterway only and delivers on board the vessel; CIP works for any mode and delivers at the first carrier, which is how containers and air cargo actually change hands
• Cover: CIF still requires only Institute Cargo Clauses (C), a named-perils minimum; CIP requires (A)
• Choice: ICC guidance points containerized cargo to CIP rather than CIF. Compare the two in the Incoterms explainer

Against CPT, the only difference is the insurance obligation; delivery, risk and carriage are the same.

CIP on a US import

• Customs value. The CIP price bundles the goods with freight and the insurance premium. US transaction value excludes international freight and insurance (19 U.S.C. 1401a(b)(4), 19 CFR 152.102(f)), so both are deducted, but only at their actual cost, as CBP does not accept estimates. Freight in the US after importation to an inland destination is excluded only if identified separately (19 U.S.C. 1401a(b)(3)). Ask the seller to itemize the freight and premium
• ISF and release. For ocean cargo the buyer is normally the ISF Importer under 19 CFR 149.1, even though the seller's forwarder booked the freight, and the bill of lading goes to the seller's side
• Air cargo. CIP is the correct term where a supplier would say "CIF by air". The air waybill is not a document of title, so check it names you or your broker as consignee

Estimate the duty, including Section 301, Section 232 and any other additional duties in force, in the tariff simulator.

Buying CIP through Airlift

If your supplier ships CIP, ask for a copy of the policy or certificate before shipment and check the clauses and the destination it covers. Airlift can file the ISF, coordinate the entry through our licensed customs-broker network (customs clearance) and arrange delivery from the destination, with cargo insurance for the inland leg beyond it. To see what the bundled freight is worth, ask for an FCA price and compare it with our ocean freight or air freight quote in rate search.