Incoterms CIP

Understanding CIP Incoterms

CIP Incoterms, or "Carriage and Insurance Paid To," are international commercial terms defined by the International Chamber of Commerce (ICC). They stipulate that the seller is responsible for paying for transportation and insurance until the goods reach the agreed location with the buyer. This means that the seller must not only arrange and pay for transportation but also take out insurance covering at least 110% of the value of the goods, in accordance with ICC rules.

Seller's Responsibilities

• Transportation: The seller arranges and pays for transportation to the agreed destination.
• Insurance: The seller must take out insurance covering the risks of loss or damage during transportation.
• Documents: Provide all necessary documents for transportation and insurance.

Buyer's Responsibilities

• Unloading: The buyer is responsible for unloading the goods upon arrival.
• Customs Formalities: Handle import customs formalities and associated taxes.

Practical Tips

• Check the Insurance: Ensure that the insurance taken out by the seller is adequate for your specific needs.
• Clarify the Destination: Clearly define the destination in the contract to avoid any ambiguity.

CIP Incoterms are often used for multimodal transport, meaning they are suitable for shipments involving multiple modes of transport, such as road, sea, and air transport. By choosing CIP, buyers benefit from a certain peace of mind, knowing that the seller manages the logistical aspects and ensures coverage in case of an incident during transport.