CIP (Carriage and Insurance Paid To)
Incoterm identical to CPT but with the additional obligation for the seller to procure transport insurance covering the goods to the named destination.
Definition and Principle
CIP (Carriage and Insurance Paid To) is a multimodal Incoterm similar to CPT, with an additional obligation: the seller must procure transport insurance covering the goods to the named place of destination.
Major Incoterms 2020 Change
Incoterms 2020 significantly enhanced the CIP insurance obligation compared to previous versions:
- CIP 2020: insurance at Institute Cargo Clauses (A) level (all-risks cover)
- CIF 2020: insurance at Clause (C) level (minimum cover)
This distinction is one of the most important changes in Incoterms 2020. Cover A covers all risks of loss or damage, except specific exclusions.
Dissociation of Risk and Cost
Like CPT, CIP involves a dissociation:
- Risk transfers upon delivery to the first carrier
- Costs (transport + insurance) borne by the seller to destination
The insurance procured by the seller benefits the buyer, who is the beneficiary of the policy.
Recommended Usage
CIP is recommended for multimodal and containerised transport when the buyer wants the seller to arrange both transport and insurance. For maritime bulk transport, CIF remains more appropriate.