Incoterms
CIP (Carriage and Insurance Paid To)
Incoterm under which the seller pays carriage and all-risks insurance to a named destination, with risk passing at the first carrier.
In four languages
CIP is the any-mode equivalent of CIF, with one important difference: under Incoterms 2020 the seller must provide broad Institute Cargo Clauses (A) cover, not the minimum (C) cover required under CIF, at no less than 110% of the contract value. The seller clears export and pays transport to the named place, but risk passes to the buyer when the goods are handed to the first carrier. The insurance must allow the buyer to claim directly. War and strikes cover are extras at the buyer's request. ICC recommends CIP instead of CIF for containers. Example: a Muscat importer agrees CIP Muscat warehouse for medical equipment from Shanghai. The supplier pays sea freight and onward trucking and provides an all-risks policy, while the importer handles customs clearance, duty and VAT in Oman.
Questions
What insurance does CIP require?
Under Incoterms 2020, Institute Cargo Clauses (A), the broad all-risks cover, for at least 110% of the contract value, unless the parties agree otherwise.
Is CIP better than CIF for containers?
ICC recommends CIP for containers, because risk passes on handover to the carrier and the required insurance is broader.