What is CIP?
Carriage and Insurance Paid to (CIP) is a term describing when a seller pays freight and insurance costs to deliver goods to a seller-appointed party at an agreed upon location.
CIP requires the seller to ensure the goods at 110% of the sale contract value, under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwires —Institute Cargo Clauses ( C ). 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.
According to the CIP Incoterms, when does the seller’s obligation end?
CIP mandates that the risk of damage or loss to the goods transfers from the seller to the buyer as soon as they are delivered to the carrier or appointed person. It is comparable but different in Cost, Insurance and Freight (CIF).
When should CIP be used?
CIP can be used for all modes of transport.
For non-containerized ocean shipments, the Incoterm CIF can be applied for similar conditions.
If the buyer doesn’t require the seller to purchase insurance for goods during transit, CPT can be applied instead of CIP.
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