CIP, or Carriage and Insurance Paid To, is an international trade term defined in the Incoterms rules published by the International Chamber of Commerce (ICC). CIP is a versatile Incoterm that can be used for various modes of transportation, including road, rail, air, and sea. It outlines the responsibilities, costs, and risks between the seller and the buyer.

Delivery Point

In a CIP transaction, the seller is responsible for delivering the goods to the named destination (often a place or location) agreed upon by the buyer and seller. The seller is also responsible for the cost of transportation to that destination and obtaining insurance coverage for the goods during transit.

Seller's Responsibilities

Under CIP, the seller is responsible for:

• Packaging and preparing the goods for export.
• Transporting the goods to the named destination, which can be in the seller's own country or another country.
• Paying for the transportation costs to the named destination.
• Providing and paying for insurance to cover the goods during the entire transportation process.
• Providing the buyer with any necessary documents, like invoices, export licenses, insurance certificates, or other documentation.

Buyer's Responsibilities

• Unloading the goods at the named destination.
• Handling import customs formalities, duties, taxes, and clearances.
• Bearing any costs or risks incurred after the goods have been delivered to the named destination.

Transfer of Risk

Risk is transferred from the seller to the buyer at the point when the goods are delivered to the named destination. However, due to the requirement for the seller to provide insurance, the seller remains responsible for the goods' condition during the entire transportation process. After delivery at the named destination, the buyer assumes the risks.

CIP is a flexible Incoterm that offers buyers a greater level of security by requiring the seller to provide insurance coverage for the goods during transit. It allows the buyer to have more control over the import process while still benefiting from the seller's assistance in arranging and paying for transportation and insurance. Clear specification of the named destination and a well-defined agreement between the parties are essential for a successful CIP transaction.