CIP (Carriage and Insurance Paid To) is an Incoterm where the seller pays for transportation and insurance of goods up to a specified destination. Unlike CIF, CIP can be used for any mode of transport.
How It Works:
- The seller prepares and dispatches the goods.
- The seller arranges transportation to the agreed destination.
- Insurance coverage is purchased by the seller.
- Risk transfers to the buyer once the goods are handed over to the first carrier.
- The buyer handles import clearance and final delivery.
Benefits:
- Provides insurance coverage during transit.
- Applicable to air, sea, rail, and road transport.
- Offers flexibility in multimodal logistics.
- Reduces risk exposure for buyers.
Example:
An electronics exporter sends products to France via air cargo under CIP terms. The seller pays for transport and insurance until the goods reach the agreed destination.