CIP: CARRIAGE AND INSURANCE PAID TO (named place of destination)

Carriage and Insurance Paid to named place of destination on the buyer's side. It may ne used for multimodole transport, container stations, and any mode of transport, including air. Under this term, the seller must pay the costs and freight to bring the good to the named port of destination on the buyer's side; however, the risk of loss or damage to the goods, as well as any additional cost due to events occurring after delivery to to the first carrier are for the account of the buyer. The seller agrees to pay for pre-carriage, export clearence, main-carriage, minimum cover marine cargo insurance so that the buyer can make a claim, unloading at the agreed port of discharge under the contract of carriage. The buyer agrees to pay for everything else: additional port of destination costs that are not under the contract of carriage, import clearence, and on-carriage.

CIP is only one of two Incoterms that require insurance. You might think that means the seller is resposible for the condition of the goods while in main-carriage transit. This is not the case. The risk transfers when the goods pass the ship's rail. The seller is resposible for any mishaps on the pier side of the rail and the buyer is resposible for any mishaps on the ship-side of the rail. The seller is required to purchase insueance for the account of the buyer if anything happens in transit. If something happens after the cargo passes the ships rail, the buyer makes a claim directly to the insurance company. Be aware that only minimum cover marine cargo insurance is required, otherwise known as, free of particular average. This may not be sufficient coverage for the buyer or seller.