CIF vs CIP: which Incoterm should you use?
CIF (Cost, Insurance and Freight) versus CIP (Carriage and Insurance Paid To) — who pays freight, where risk transfers, and what each choice does to your landed cost. Last reviewed 16 July 2026.
CIF is sea-only with minimum insurance cover; CIP works for any mode and, under Incoterms 2020, requires the seller to buy maximum all-risks cover.
CIF vs CIP at a glance
| Factor | CIF — Cost, Insurance and Freight | CIP — Carriage and Insurance Paid To |
|---|---|---|
| Group | C — Main carriage paid | C — Main carriage paid |
| Transport mode | Sea & inland waterway | Any mode |
| Who pays main freight | Seller | Seller |
| Insurance obligation | Seller must insure — minimum cover only (Institute Cargo Clauses C) | Seller must insure — maximum cover (Institute Cargo Clauses A) under Incoterms 2020 |
| Risk transfers | When goods are loaded on board at the port of shipment — before the seller-paid freight | When goods are handed to the first carrier — before the seller-paid carriage |
| Export clearance | Seller | Seller |
| Import clearance | Buyer | Buyer |
| Best for | Sea freight where the buyer wants a single quote covering goods, freight and basic insurance | Multimodal cargo where the buyer wants carriage plus all-risks insurance bundled in |
Based on the Incoterms 2020 rules (ICC). Always confirm the exact obligations in your sales contract — as of 16 July 2026.
When to choose CIF
Choose CIF for straightforward port-to-port sea freight where a single quote covering goods, ocean freight and a basic insurance layer is enough. It remains the classic term for bulk and container sea shipments, provided you accept the minimum cover or intend to top it up.
When to choose CIP
Choose CIP for containerised, air or multimodal cargo where you want carriage and comprehensive insurance bundled in. The big 2020 change is that CIP now requires the seller to insure at the maximum level (Institute Cargo Clauses A), so you get all-risks protection to the destination — a meaningful upgrade over CIF's bare minimum.
What it does to your landed cost
CIP costs more than CIF for the same lane because the mandated insurance is far broader, but it removes the need to arrange your own top-up cover. Both bundle freight and insurance into the seller's price, which feeds the customs value your duty and import VAT are charged on — so a higher insured value can lift the dutiable base. Weigh the premium against the protection, and run both through the calculator to see the per-unit landed difference.
Enter your goods value, freight and quantities to see duty, import VAT and per-unit landed cost under each Incoterm — in seconds, free.
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