CIP – Carriage and Insurance Paid To (Incoterm)

The Incoterm CIP stands for ‘Carriage and Insurance Paid to’. This incoterm is applicable to all modes of transport and is one of the dispatch clauses where the seller bears the costs of the entire transport to the destination and provides transport insurance.

Here, the seller delivers the goods to the first carrier and organises, at their own expense but at the buyer's risk, the transport of the goods to the agreed destination (e.g. port, airport, railway station, customer's premises). In addition, the seller must take out ‘all-risk transport insurance’ (Institute Cargo Clauses – Covering A) covering 110% of the value of the goods in favour of the buyer.

This clause is preferable to the CIF clause when transporting general cargo or containerised goods.

The seller hands over the goods to the carrier at an agreed location. The seller is responsible for freight costs and insurance up to this location. Furthermore, the seller must take out transport insurance (with minimum cover) at their own expense. The CIP clause also obliges the seller to package and clear the goods for export.

• As with all C clauses, it is mandatory to engage a carrier, otherwise the transfer of risk occurs only at the destination.
• Remember that when calculating the statistical value, all transport costs incurred after leaving the EU's external border must be deducted from the value of the goods.