Incoterms CIF: Cost, Insurance and Freight
Named Place Requirement: Port of Destination
|Applies to:||Sea and inland waterway only|
Under CIF (short for “Cost, Insurance and Freight”), the seller delivers the goods, cleared for export, onboard the vessel at the port of shipment, pays for the transport of the goods to the port of destination, and also obtains and pays for minimum insurance coverage on the goods through their journey to the named port of destination.
The buyer assumes all risk once the goods are on board the vessel for the main carriage; however, they don’t take on any costs until the freight arrives at the named port of destination.
CIF applies to ocean or inland waterway transport only. It is commonly used for bulk cargo, oversized or overweight shipments.
If the freight is containerized and delivered only to the terminal, use CIP instead. If using CIP instead, insurance coverage defaults to all-risk; however, the parties may negotiate a lower coverage requirement.
|The seller is obligated to secure insurance for the buyer, but only for minimum coverage.|
CIF Incoterm Obligations
- Goods, commercial invoice and documentation
- Export packaging and marking
- Export licenses and customs formalities
- Pre-carriage and delivery
- Loading charges
- Delivery at named port of destination
- Proof of delivery
- Cost of pre-shipment inspection
- Minimum insurance coverage
- Payment for goods as specified in sales contract
- Discharge and onward carriage
- Import formalities and duties
- Cost of import clearance pre-shipment inspection