Incoterms 2020 · Sea & inland waterway only
CIF (Cost, Insurance and Freight) — meaning & when to use
Under CIF the seller pays the cost, insurance, and freight to the destination port — but risk still passes at loading. Here's exactly how CIF works.
CIF (Cost, Insurance and Freight) is a sea-freight Incoterm where the seller pays the cost of goods, marine insurance, and freight to the named destination port. Crucially, risk still transfers to the buyer at loading — so the seller pays freight, but the buyer bears the risk in transit.
Where risk transfers
Risk passes when the goods are loaded on board at the port of shipment — even though the seller pays freight and insurance to the destination port.
Responsibilities
Who pays for what
Seller is responsible for
- Packaging and export customs clearance
- Loading on board the vessel
- Main sea freight to the destination port
- Minimum marine insurance cover
Buyer is responsible for
- Import customs clearance and duty
- Destination terminal/port charges
- Onward delivery to the final destination
- Any insurance above the minimum cover
When to use it
When CIF makes sense
CIF is common when the buyer wants a landed-at-port price and prefers the seller to arrange shipping. Note the seller only has to provide minimum insurance cover, so buyers wanting broader protection should arrange their own or use CIP.
FAQ
CIF — common questions
What does CIF mean?
CIF (Cost, Insurance and Freight) means the seller pays the cost, insurance, and freight to the named destination port. However, risk passes to the buyer at loading, so the buyer bears the risk during the sea voyage.
Who bears the risk under CIF?
The buyer bears the risk once goods are loaded on board, even though the seller pays for freight and insurance to the destination. This split surprises many first-time importers.
What insurance does the seller provide under CIF?
Under CIF the seller only needs to provide minimum (institute cargo clauses C) insurance cover. Buyers wanting all-risk cover should arrange additional insurance or negotiate CIP instead.
Other Incoterms
Compare the terms
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