01Obligations under CIP
Seller: Export clearance, main carriage, comprehensive insurance (ICC Clauses A).
Buyer: Risk from first carrier, import clearance, on-carriage from destination.
The precise split of the 10 obligation pairs (A1–A10 / B1–B10) is binding under the ICC Incoterms 2020 rules.
02Risk and cost transfer
Risk transfer: At handover to the first carrier.
Cost transfer: Seller pays freight and insurance to destination.
For several Incoterms, the risk and cost points do not coincide — this is the biggest source of misunderstanding in international trade. Cargo insurance should always be aligned with the risk transfer point, not the cost transfer point.
03When to use CIP
The 2020 revision lifted the insurance standard from ICC C to ICC A — seller must now arrange all-risk cover. Ideal for high-value goods and multimodal transport.
Before choosing, verify: Can both parties operationally handle customs, carriage and insurance in the respective country? Are there tax implications (e.g. VAT under DDP)? Which documents (commercial invoice, certificate of origin, B/L, CMR, AWB) are required?
04Common pitfalls
1) Mode mismatch: CIP works for all modes — but always specify the named place precisely (city, country, optionally a terminal code) on the commercial invoice.
2) On-board notation: For sea Incoterms, a correct on-board notation on the B/L is critical for letter-of-credit settlement.
3) Insurance cover: Explicitly agree ICC A / B / C and the sum insured.
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What does CIP mean in practice?
Like CPT, plus the seller must arrange comprehensive insurance (ICC A). Applicable to any mode of transport. Risk transfer: At handover to the first carrier.
Who pays cargo insurance under CIP?
The seller arranges minimum insurance (CIP: ICC A, CIF: ICC C). For high-value cargo, buyers should negotiate additional cover.
Is CIP suitable for containers?
Yes. The term applies to all modes, including container transport.