Incoterms 2020 · CFR plus minimum seller-arranged cover
CIF — Cost, Insurance and Freight
The seller pays freight and buys minimum cargo insurance to the destination port; risk passes on board at origin.
Key facts
| Risk passes | When the goods are on board the vessel at the origin port |
|---|---|
| Export clearance | Seller |
| Import clearance and duty | Buyer |
| Main carriage | Seller pays to the named destination port |
| Insurance | Seller buys ICC (C) minimum cover at 110% of contract value |
| Unloading at destination | Buyer, unless the contract includes it |
| Best for | Sea freight where the buyer wants minimum cover arranged by the seller |
| Source | ICC Incoterms 2020, CIF |
CIF insurance is minimum cover
The default CIF cover is Institute Cargo Clauses (C), which covers major perils but not every loss. It is not the all-risk cover that CIP requires. A buyer who needs broad protection should ask for ICC (A) explicitly and expect to pay for it.
The insured amount is 110% of the contract value in the contract currency. War and strikes cover is not included by default; routes with those exposures need an extension.
CIF is not a delivered-price rule
The seller pays freight to the destination port, but risk passes at the origin port and the buyer still clears import and pays duty. CIF does not deliver the goods to the buyer's door and does not include import taxes.
For a door-delivered price, use DAP or DDP. For a landed-cost model, treat CIF as goods plus freight plus minimum insurance, then add duty, import tax and destination charges.
Frequently asked questions
What insurance does CIF require?
Institute Cargo Clauses (C), the minimum cover, at 110% of the contract value unless the parties agree otherwise.
Who pays import duty under CIF?
The buyer. CIF covers cost, insurance and freight to the destination port, not import clearance or duty.
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