When does risk pass under CIF?

When the goods are loaded on board the vessel at the port of shipment — even though the seller pays the freight and insurance to the destination port.

What insurance does CIF require?

At least Institute Cargo Clauses (C), the minimum level of cover, for no less than 110% of the value. Incoterms 2020 left CIF's requirement unchanged from 2010.

What is the difference between CIF and CIP?

CIF is for sea and inland waterway and needs only Clauses (C) cover. CIP works for any mode, including containers handed to a carrier, and since 2020 needs Clauses (A), the broadest cover.

Term

CIF (Cost, Insurance and Freight)

CIF, or Cost, Insurance and Freight, is an Incoterms rule under which the seller pays the sea freight and buys cargo insurance to the destination port, but risk passes to the buyer once the goods are loaded on board at the port of shipment. The insurance only has to meet the minimum cover, Institute Cargo Clauses (C).

Also called Cost, Insurance and Freight, CIF Incoterm, CIF priceUpdated 12 October 2026

What the seller and buyer each do

The seller clears export, loads the goods on board, pays the freight to the named destination port and insures the voyage.
Risk passes to the buyer when the goods are loaded on board the vessel — before the voyage the seller paid for.
The buyer clears import, pays duties and takes delivery at the destination port.
CIF is for sea and inland waterway transport only.

The insurance

Incoterms 2020 kept CIF's insurance where it was in 2010: the seller needs only Institute Cargo Clauses (C), the minimum cover. For CIP — the any-mode equivalent — the 2020 edition raised the requirement to Clauses (A), the broadest. Cover is set at no less than 110% of the value, so the buyer is insured for the goods plus a margin.

Worked example

Suppose a CIF contract worth USD 80,000 and an insurer quoting 0.15% of the insured value.

Insured value ≥ 110% × 80,000 = USD 88,000 · Premium = 0.15% × 88,000 = USD 132

If the ship sinks after loading, the loss is the buyer's — and the buyer claims on the policy the seller bought, for up to USD 88,000, on the terms of Clauses (C).

In the Gulf

ICC's 2025 review of national barriers notes that the UAE allows foreign transport insurance under CIF up to the point of entry but not under CIP, while Saudi Arabia allows it under both — a reason to check local rules before choosing between them.

The mistake people make

Reading CIF as a promise of delivery. ICC guidance warns that CIF gets conflated with an obligation to ensure the goods arrive; the seller's job ends on board. A buyer who needs more than minimum cover should ask for it in the contract, or buy its own.

FAQ