Incoterms 2020 · CPT plus all-risk seller-arranged cover
CIP — Carriage and Insurance Paid To
The seller pays carriage and buys broad cargo insurance to the named destination; risk still passes at the first carrier.
Key facts
| Risk passes | When the goods are handed to the first carrier |
|---|---|
| Export clearance | Seller |
| Import clearance and duty | Buyer |
| Main carriage | Seller pays to the named destination |
| Insurance | Seller buys ICC (A) cover at 110% of contract value |
| Unloading at destination | Buyer, unless the contract includes it |
| Best for | High-value goods where the buyer wants the seller to arrange broad cover |
| Source | ICC Incoterms 2020, CIP |
CIP 2020 raised the insurance standard
In the 2010 rules, CIP and CIF both required minimum cover. Incoterms 2020 split them: CIP requires Institute Cargo Clauses (A), the broad all-risk cover, while CIF keeps the minimum (C) cover. If a contract still cites CIP 2010, the insurance obligation may be narrower than the parties expect.
The default insured amount is 110% of the contract value, in the contract currency. War and strikes cover is not included unless the parties agree. High-risk routes often need that extension.
CIP is not DAP
CIP delivers to a carrier at origin, not to the buyer's door. The seller pays freight to the destination but does not clear import, pay duty or unload. A buyer who wants the goods delivered and ready for unloading should use DAP; a buyer who wants duty paid should use DDP.
For a landed-cost model, treat CIP as goods plus freight plus insurance plus origin charges. Add duty, import tax and destination handling separately.
Frequently asked questions
What insurance level does CIP require?
Institute Cargo Clauses (A), the broad all-risk cover, at 110% of the contract value unless the parties agree otherwise.
Does CIP cover import duty?
No. Import clearance, duty and taxes remain with the buyer.
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