GlossaryEN1 min readUpdated: Jun 26, 2026
Cost, Insurance and Freight (CIF)
Under CIF (Cost, Insurance and Freight), risk passes to the buyer the moment goods are loaded on board at the port of shipment — even though the seller continues to pay ocean freight and a minimum cargo insurance through to the named destination port.
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Source: https://iccwbo.org/business-solutions/incoterms-rules/
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Incoterms 2020 Simulator: Who bears costs & risk?
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Definition & Explanation
Under CIF (Cost, Insurance and Freight), risk passes to the buyer the moment goods are loaded on board at the port of shipment — even though the seller continues to pay ocean freight and a minimum cargo insurance through to the named destination port. CIF is an Incoterm reserved exclusively for sea and inland waterway transport, and one of the oldest maritime trade terms in use. The minimum insurance standard is Clause C of the Institute Cargo Clauses unless a higher cover is contractually agreed; the buyer is the named beneficiary under the seller's policy but must pursue any claim independently. This split — seller pays, buyer bears the risk — is the most common source of disputes in CIF transactions. The term remains the benchmark in bulk commodity and raw material trades. Parties needing broader protection should negotiate Clause A cover or consider CIP, which mandates more comprehensive insurance and applies to all modes of transport.
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⚖️ ICC Incoterms 2020
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