Incoterms CIP: Spotlight on Carriage and Insurance Paid To

David Noah | November 2, 2016 | Export Basics, Incoterms
Print this article:

Incoterms CIP Spotlight on Carriage and Insurance Paid To | Shipping SolutionsIncoterms are the official International Chamber of Commerce (ICC) rules for the explanation of trade terms.

Incoterms 2010 are adhered to by all major trading nations of the world, and it is the authoritative text for determining how costs and risks are allocated to the parties conducting international transactions. Incoterms facilitate the conduct of international business by defining the responsibilities of the involved participants.

This is the sixth article in our series investigating the basic meaning of all 11 Incoterms.

We’ve also covered the following:

Today, we’re discussing the Incoterm CIP, also known as Carriage and Insurance Paid To.


To learn more about which trade term is the best for your export,
check out this chart of responsibilities.


What Does the CIP Trade Term Mean?

The Incoterm Carriage and Insurance Paid To (CIP) means “the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.” (ICC)

When Can CIP Be Used?

CIP can be used for any transport mode—air, courier, truck, rail, vessel or multi-modal.

Benefits and Considerations of CIP

  • With the CIP term, the seller also contracts for minimum insurance coverage against the buyer’s risk of loss of or damage to the goods during the carriage.
  • If the buyer wants more insurance, they should make an explicit agreement for additional insurance coverage in the sales contract or make their own arrangements for extra insurance.
  • Watch out for Terminal Handling Charges, which are made by the terminal operator. They may or may not be included by the carrier in their freight rates. The buyer should enquire whether the price includes THC to avoid surprises. (Source)

Learn More about Incoterms and CIP

Looking for more information about Incoterms? Check out the archive of Incoterms-related articles on our International Trade Blog.

To get you started, we’ve chosen several of our most popular articles along with other industry resources:

Shipping Solutions export software can help you streamline the process of recording which Incoterms version you’re using and make sure your documentation is correct throughout the transaction. You can try it for free today!

Download Incoterms 2010 Chart of Responsibilities