# CIP, Carriage and Insurance Paid To (Incoterms 2020)

CIP (Carriage and Insurance Paid To) means the seller pays carriage to the named destination and buys cargo insurance for the buyer at Institute Cargo Clauses (A) level for 110 % of the contract value, but risk passes when the goods are handed to the first carrier. It works for any mode.

- Transport: any mode
- Delivery and risk transfer: When the goods are handed over to the first carrier, with carriage and ICC (A) insurance paid by the seller to the named destination.
- Seller's costs run to: Arrived at destination plus insurance, ICC (A), 110 %

## Responsibilities

| Job | Who |
|---|---|
| Export clearance | Seller |
| Loading at origin | Seller |
| Main carriage | Seller |
| Insurance | Seller, ICC (A) |
| Unloading at destination | Buyer, unless in seller's freight contract |
| Import clearance and duties | Buyer |

## Common mistakes

- **Cover changed in 2020** Under Incoterms 2010 CIP needed only ICC (C). Incoterms 2020 raised it to ICC (A). Check old contract templates and insurance certificates.
- **Insured value** The policy must cover at least 110 % of the contract price, in the contract currency, and allow the buyer to claim directly.
- **Risk is still the buyer's** As with CPT, the buyer takes the risk from the first carrier; the policy is what protects it.

## CIP or CIF?

CIF is the sea-only version, with the narrower ICC (C) minimum cover.

Incoterms® is a trademark of the International Chamber of Commerce; CartonMath is not affiliated with the ICC.

## FAQ

**What does CIP mean?**
CIP (Carriage and Insurance Paid To) means the seller pays carriage to the named destination and buys cargo insurance for the buyer at Institute Cargo Clauses (A) level for 110 % of the contract value, but risk passes when the goods are handed to the first carrier. It works for any mode.

**When does risk pass under CIP?**
When the goods are handed over to the first carrier, with carriage and ICC (A) insurance paid by the seller to the named destination.

**Who pays the main freight under CIP?**
The seller arranges and pays the main carriage.

**Who pays import duties under CIP?**
The buyer clears the goods for import and pays any duties and taxes under CIP.

**Can CIP be used for container shipments?**
Yes. CIP works for any mode of transport, including containers and multimodal shipments.

Source page: https://cartonmath.com/incoterms/cip/
Updated: 2026-10-06
Publisher: CartonMath (https://cartonmath.com)