What is CIF ?
Cost, Insurance & Freight (CIF) is a term used to describe an expense paid by the seller to cover the costs, insurance, and freight against the possibility of loss or damage to goods while they’re in transit.
CIF is nearly identical to CFR (Cost and Freight), but also holds the responsibility of purchasing insurance for the goods while they’re being transported to the destination port. CIF requires the seller to insure the goods for 110% of their value. The policy must be in the same currency as the contract of sale of goods.
The seller must also turn over the documents, necessary to obtain the goods from the carrier or to file a claim against the insurer. These documents usually include the invoice, the insurance policy, and the Bill of Lading.
According to CIF Incoterms, when does the seller's obligation end?
According to CIF, the seller’s obligation ends when the documents are handed over to the buyer.
When should CIF be used?
CIF should only be used for non-containerized ocean freight. With other modes of transport, the CIP Incoterms would apply.