CIP - Carriage and Insurance Paid To - What is the meaning of CIP shipping term? With the CIP Incoterm, the seller arranges the transportation, costs and insurance on behalf of the buyer to a named place at destination.
The risk is transfered to the buyer once delivered to the first carrier. The seller is obliged to obtain extensive insurance cover complying with insurance cargo clauses (A) or similar clauses in the buyer's name. It is important to check levels of cover and investigate if additional insurance is required. The seller pays for insurance.
The seller is responsible for the cost of carriage as well as all-risk insurance coverage. Insuring the goods is not an item to overlook if you are the seller and it is important to check your minimum insurance and levels of cover, additional insurance may be required. As with Incoterm CPT, the delivery of the goods takes place, and risk transfers from seller to buyer, at the point where the goods are taken in charge by a carrier. The buyer is responsible from that point onwards regardless of the mode of transport.
With all incoterms it is important to understand the obligations of both the buyer and seller. There are eleven incoterms covering international shipments, are you aware of all the different options? If you need shipment support, please reach out to the team!
FREE DOWNLOAD: You can download our free Incoterms chart which provides simple explanations of all eleven incoterms here