Cost, Insurance and Freight
Sea & inland waterwayLike CFR, but the seller also buys minimum marine insurance (Institute Cargo Clauses C) for the buyer’s benefit. Risk still transfers on board at the origin port.
Written as: CIF [named port of destination]
Cost, Insurance and Freight
CFR plus minimum marine insurance
Hover a stage to see who is responsible.
Cost and risk split here
With CIF, the seller pays for carriage all the way to destination, but risk passes to the buyer at Main carriage (freight). The buyer should insure the goods from that point.
| Stage | Who pays | Who's at risk |
|---|---|---|
| Export packaging | Seller | Seller |
| Loading at origin | Seller | Seller |
| Inland to origin port | Seller | Seller |
| Export customs | Seller | Seller |
| Origin terminal charges | Seller | Seller |
| Loading on main carrier | Seller | Seller |
| Main carriage (freight) | Seller | Buyer |
| Destination terminal charges | Buyer | Buyer |
| Import customs & duty | Buyer | Buyer |
| Inland to destination | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Seller's responsibilities
- Pay freight to the destination port
- Buy minimum (ICC C) marine insurance
Buyer's responsibilities
- Bear risk from on board at the origin port
- Pay import, duties, and onward transport
Risk transfer
Under CIF, the risk of loss or damage passes from the seller to the buyer at Main carriage (freight).
With CIF, the seller pays for carriage all the way to destination, but risk passes to the buyer at Main carriage (freight). The buyer should insure the goods from that point.
Insurance
Seller — minimum cover (ICC C)
When to use it
Common for commodity sea trade and letters of credit, where a seller-provided insurance document is expected.
Watch out
CIF insurance is only minimum cover. For valuable or fragile goods, the buyer should arrange additional insurance.
Frequently asked
- How much insurance does the seller provide under CIF?
- Only minimum cover (ICC Clause C) at 110% of the invoice value. CIP, by contrast, requires all-risk cover (ICC A).