CIPCarriage and Insurance Paid To

CIP is what most buyers think CIF is. The seller pays the carriage to your named place and must buy all-risks insurance in your favour, and for a container of finished goods from India it's the C term we'd pick.

Here's the catch we want you to see before you sign. All-risks is not every risk, and the one that bites Indian furniture and textile buyers most is a risk no insurer covers on any term. This page walks through the rule, the certificate and that gap. The rules quoted are Incoterms 2020, in force since 1 January 2020, and as of 28 September 2026 the ICC has published no newer edition.

The Mango-Wood Table That Cracked On Arrival

In October 2024 someone in Germany posted a photo of a new mango-wood dining table on a woodworking forum. "The table top had slight cracks (hairline cracks) right from the start." Five or so replies agreed on the cause - the slab was finished before it was dry enough, and a heated European home did the rest (r/woodworking, October 2024). Two years earlier, on the same forum, someone who "imports a lot of solid wood furniture internationally, mostly India" described the same shrinking (r/woodworking, December 2022).

Now picture that table as one of a few hundred in a 40-foot container from Jodhpur, bought CIP with a proper policy. You'd think you were covered. You'd be wrong, and the reason is in the insurance clauses, not in the Incoterm. We'll come back to it once the rule itself is clear.

What CIP Means

Carriage and Insurance Paid To. The seller delivers the goods to the carrier it has contracted, at an agreed place in India, cleared for export. It pays the carriage to the named destination and buys insurance against your risk of loss or damage on the way.

Since the 2020 edition the required cover is Institute Cargo Clauses A or equivalent, the all-risks standard, for at least 110% of the contract price, with the policy in your favour. It works for any mode, including sea and road together. Think of it as the any-mode cousin of CIF, with better insurance.

Who does what

Where The Risk Passes, And Why The Insurance Is Yours

Risk passes at the handover to the first carrier in India. The seller has paid to get the goods to your named place and has insured the trip, but the risk itself is yours from the depot or cargo terminal onward.

So the policy the seller buys is really your policy. It covers your risk, you're the one who claims on it, and if it's thin then you're the one who finds out. That's why the ICC raised the cover in 2020. The ICC Academy explains that manufactured goods need more than the named-peril cover that suits bulk commodities under CIF (ICC Academy, CIF and CIP, October 2024 (opens in a new tab)).

How To Write It

CIP has two places, like CPT. CIP [your warehouse], Rotterdam, Incoterms 2020, delivery to carrier at ICD Tughlakabad, Delhi. Name the delivery point so the risk point is fixed, and name the destination the carriage is paid to.

You can agree lower cover than Clauses A if you want to. We can't think of a good reason for finished goods, and if a supplier asks for it then ask why.

When CIP Fits, And When It Doesn't

CIP fits containers and air freight of finished goods where the seller arranges carriage and you want proper cover without buying it yourself. Apparel, home textiles, furniture, ceramics and engineering parts in cartons all suit it. It suits a buyer without an annual cargo policy best. If you already hold one then CPT plus your own policy may cost you less.

It doesn't fit a buyer who needs to pick the forwarder, because the seller books the carriage. And it doesn't fit countries where transport insurance must be bought from a local insurer, which the ICC's January 2025 paper on national regulatory barriers flags as a real obstacle for CIP and CIF (ICC, National regulatory barriers (opens in a new tab)). A seller in India then can't lawfully insure you. Ask your broker whether that applies at your end before you write CIP.

What All-Risks Doesn't Cover

Back to the mango-wood table. Institute Cargo Clauses A cover all risks of loss or damage, with a short list of exclusions, and two of them matter far more for India than any storm at sea. The clauses exclude loss caused by insufficient packing or preparation of the goods, and loss caused by inherent vice or the nature of the goods (Institute Cargo Clauses A, clauses 4.3 and 4.4). Wood that was too wet when it was finished, and cracks once it dries out in your warehouse, is the textbook case of inherent vice.

So the container of cracked tables arrives, the certificate says Clauses A for 110%, and the claim is declined. The insurer isn't being difficult. Nothing happened in transit, and the damage was in the wood before it left India.

Packing is the second trap. Indian exporters often floor-load containers without ISPM 15 pallets, and one logistics voice put it bluntly - "Stuffing is not one of the strengths of Indian exporters" (r/logistics, April 2026). If a carton stack collapses because it was badly stuffed then the packing exclusion can apply, even on a CIP contract where the seller did the stuffing. The fix is in the PO, not the policy: palletised, ISPM 15 marked (ISPM 15), a maximum carton weight, and for wood a maximum moisture content that an inspector checks with a meter before the box is sealed.

Other Things To Watch

• Read the certificate, not the term. The rule requires Clauses A, 110%, in your favour. The certificate the seller sends should say all three. If it says "ICC (C)" then the seller bought CIF-level cover on a CIP contract and you're under-insured.
• Destination charges. As with every C term, the seller's freight stops at your named place and the destination agent's charges may not be in it. Get that agent's tariff before you accept the price.
• The claim is yours to run. You're the insured. Photograph everything at unloading, notify the insurer within the policy's window, and keep the container survey.

Who Uses It From India

No one publishes usage figures, so we won't give you a share. From our reading of Indian quotes and buyer threads, CIP is uncommon and usually appears only when a European or Australian buyer asks for it. Indian suppliers offering seller-arranged sea freight reach for CIF by habit. When you ask for CIP some will need it explained, and a few will quote it with Clauses C attached, which tells you they haven't read the 2020 rules. Indicative.

What It Means For Your Landed Cost And Customs Value

CIP gives you goods, carriage and all-risks insurance in one number, with unloading, import charges, duty and tax on you. It's the easiest C term to compare across suppliers, because the rule fixes the insurance level. The landed cost calculator takes the breakdown.

For customs value, the UK and EU include carriage and insurance to the border, so the CIP figure sits close to their base (GOV.UK, Incoterms and customs valuation (opens in a new tab)). The US, New Zealand and Australia exclude international freight and insurance, so ask for them shown separately on the invoice. The country detail is on the CIF page, and the whole duty method is on working out the real import duty.

The seller provides the transport document and the insurance certificate. Check both before the goods move. If you'd like someone in India to check the certificate, the packing and the moisture readings against your PO before the container is sealed, SourcingSync (opens in a new tab) arranges that inspection.

CIP And Its Neighbours

• CIP vs CPT. Identical except the seller must insure under CIP. If you hold your own policy then CPT may be cheaper.
• CIP vs CIF. CIF is sea only, passes risk on board and requires only Clauses C. For containers of finished goods, CIP is the better term on every count.
• CIP vs FCA. Same risk point. Under FCA you book the carriage and buy the insurance yourself.
• CIP vs DAP. Under DAP the seller carries the risk to your named place, so insurance is the seller's problem until then.

The blog version of how the main terms compare is in CIF, DDP and FOB. As for the mango-wood tables, CIP was never going to save them. A moisture spec and one pre-shipment check would have.