CIF (Cost, Insurance and Freight)
Maritime Incoterm whereby the seller pays freight and procures minimum insurance to the destination port, but risk passes to the buyer when goods are placed on board.
Definition and Principle
CIF (Cost, Insurance and Freight) is one of the most widely used Incoterms in international maritime trade. Identical to CFR with the additional obligation for the seller to procure maritime transport insurance covering the goods during carriage. It is exclusively for sea or inland waterway transport.
Insurance Level
Unlike CIP which requires all-risks cover (Clause A) since 2020, CIF only requires insurance at Institute Cargo Clauses (C) level (minimum cover). This covers major risks (fire, sinking, collision, stranding) but excludes many risks (theft, wetting, breakage).
The parties may contractually agree on higher coverage.
Dissociation of Risk and Cost
- Risk transfer: when goods are placed on board at the port of shipment
- Cost transfer: at the destination port (freight + insurance)
The insurance procured by the seller benefits the buyer. The policy must cover at least 110% of the CIF value.
Usage and Recommendations
CIF is very widely used in international trade of commodities, hydrocarbons and food products. Like other maritime Incoterms, it is not recommended for containerised transport (prefer CIP). CIF frequently serves as the basis for customs value calculation in many countries (including the EU).