CIP (Carriage and Insurance Paid To) Incoterms 2020 Guide

CIP (Carriage and Insurance Paid To) is one of the 11 Incoterms 2020 rules. CIP is the insured version of CPT. The seller delivers goods to the carrier, pays freight to the named destination, and must arrange cargo insurance at minimum ICC Clause A (All-Risks) coverage. This Incoterms 2020 change makes CIP one of the safest delivery terms for buyers. CIP works for all transport modes. Brosan Logistics provides comprehensive insured logistics solutions under CIP.

CIP stands for 'Carriage and Insurance Paid To.' Quotations use 'CIP [destination]' format. CIP differs from CPT solely by the insurance obligation. Two critical points exist: risk transfer at carrier handover and cost transfer at destination. Although risk passes early, the mandatory ICC Clause A insurance largely covers this risk.

Incoterms 2020 brought a landmark change to CIP: the minimum insurance level was upgraded from ICC Clause C (major losses only) to ICC Clause A (All-Risks). ICC Clause A covers virtually all risks during transit: damage, loss, theft, water damage, overturning, and more. Insurance must cover at least 110% of the goods value in the contract currency. This change makes CIP significantly safer for buyers compared to the previous version. Note: CPT has no insurance requirement — this is the fundamental difference.

CIP imposes among the broadest seller obligations in Incoterms 2020: goods preparation, export clearance, carriage contract and freight payment to destination, ICC Clause A insurance arrangement (minimum 110% of value), loading onto carrier, transport-suitable packaging, notification, and provision of commercial invoices, transport documents, and insurance certificates.

The buyer handles import clearance, unloading at destination, and final delivery. The buyer's key advantage under CIP is that the seller has arranged All-Risks insurance, substantially covering transit risks. Brosan Logistics manages import clearance, unloading, and damage claims for CIP shipments.

Under CIP, the seller bears a heavier cost burden than CPT because insurance is added. The seller covers production, packaging, export clearance, freight, and insurance. The buyer pays import duties, unloading, and final delivery.

Risk transfers at first carrier handover, same as CPT. However, CIP's critical advantage is the mandatory ICC Clause A insurance covering virtually all transit damages. The buyer is therefore protected by insurance even though risk transfers early. CIP is significantly safer than FCA and CPT from a risk management perspective.

CIP provides comprehensive coverage with All-Risks insurance. The Incoterms 2020 ICC Clause A upgrade makes it one of the safest options for buyers.

CPT: freight without insurance. CIP: freight plus ICC Clause A insurance. CIF: sea-only with ICC Clause C (minimum) insurance. DAP: all costs and risks to destination. ICC recommends CIP over CIF for container shipments due to broader insurance and multimodal capability.

Use CIP when: buyer wants comprehensive insurance coverage; high-value goods are shipped; container transport replaces CIF; seller can bundle freight and insurance. Use CPT if the buyer prefers their own insurance. Use DAP for door-to-door service.

Example 1: Medical device import from Italy to Turkey under 'CIP Ankara Warehouse.' Seller pays freight and ICC Clause A insurance. Brosan Logistics handles Turkish import clearance. Example 2: Electronics export from Turkey to Netherlands under 'CIP Amsterdam Distribution Center.' Seller covers freight, export clearance, and All-Risks insurance.

CIP with Incoterms 2020 ICC Clause A insurance is one of the safest delivery terms. Use CIP for high-value goods and container shipments. Verify insurance covers 110% of value under ICC Clause A. Contact Brosan Logistics for free CIP consultation.