CIP (Carriage and Insurance Paid To) is the incoterm where the seller pays carriage and insurance to the named destination, while risk passes to the buyer when the goods are handed to the first carrier. It works for any transport mode.
How CIP works
It works like CPT plus insurance paid by the seller. The key difference with CIF is the cover: since Incoterms 2020, CIP requires broad cover under Institute Cargo Clauses (A), while CIF only requires the minimum, Clauses (C). The insurance must cover at least the contract value plus 10%.
When CIP makes sense for imports from China
When the cargo is valuable and you want insurance built into the supplier’s price, for example electronics flying from Shenzhen to Mexico City, or a machinery container sold “CIP Querétaro”. Always ask for the policy or certificate: you need to be able to claim yourself, as beneficiary, with an insurer that responds in Mexico.
The common mistake
Assuming “insured” means “well insured”. Check who the insurer is, what the policy excludes and whether it covers up to your warehouse or only to arrival. If the supplier’s policy does not convince you, your own cargo insurance gives you control over the claim.
In the contract: “CIP Querétaro, Incoterms® 2020”. Importing high-value cargo? We help you set the term and the cover in our logistics from China.
Who pays what under CIP
| Item | CIP |
|---|---|
| Transport mode | Any |
| Seller delivers | To the first carrier, at origin |
| Risk passes to buyer | On delivery to the first carrier |
| Export clearance | Seller |
| Main carriage | Seller, to the named destination |
| Insurance | Seller, broad cover (Clauses A) |
| Import clearance and duties | Buyer |
All 11 incoterms, side by side: EXW, FCA, FAS, FOB, CFR, CIF, CPT, DAP, DPU and DDP.
Source: International Chamber of Commerce (ICC), Incoterms® 2020 rules.
