CIP
Carriage and Insurance Paid ToCIP
Incoterms 2020
Any mode
When goods are handed to the first carrier (NOT at destination)
Cost responsibility
Seller pays carriage and insurance to destination. Risk still transfers at first carrier.
Seller obligations
- S1Export clearance
- S2Main carriage to destination
- S3Insurance (Institute Cargo Clauses A — all-risks — under Incoterms 2020)
- S4Delivery to first carrier
Buyer obligations
- B1Unloading at destination
- B2Import clearance
- B3Import duties and taxes
When to use CIP
When buyer wants the seller to arrange both transport and insurance. The Incoterms 2020 upgrade to Clause A (all-risks) makes CIP significantly better than CIF for insurance coverage.
When NOT to use CIP
Sea-only shipments where CIF is traditional. When buyer has their own global insurance policy (insurance cost is wasted).
Common mistakes with CIP
- !Confusing CIP with CIF — CIF is sea-only and only requires minimum Clause C insurance
- !Not realizing that CIP 2020 requires higher insurance coverage (Clause A) than the 2010 version