CIF — Cost, Insurance and Freight

Under CIF, the seller must arrange insurance under Institute Cargo Clauses C (or equivalent) for 110% of the contract value (CIF value + 10%). ICC C covers only named perils: fire, explosion, vessel stranding or grounding, vessel sinking, collision, discharge at a port of distress, general average, and jettison. It does not cover theft, water damage from rain, or many other common cargo risks.

Both CIF and CIP require the seller to pay freight and arrange insurance. The key differences: (1) CIF is sea-only; CIP applies to all transport modes. (2) CIF requires minimum insurance (ICC C); CIP requires all-risk insurance (ICC A). The upgrade from ICC C to ICC A in CIP was introduced in Incoterms 2020. For manufactured goods, high-value cargo, or any multimodal shipment, CIP is preferable.

Not necessarily. The seller provides minimum ICC C cover, which has significant exclusions. Water ingress, theft, contamination, and many other cargo damage scenarios are not covered. Buyers receiving goods on CIF terms should arrange complementary 'top-up' insurance if they need broader protection.

Some developing countries (including several in Africa, the Middle East, and Asia) historically required CIF for all imports to facilitate customs valuation (CIF value is the basis for import duty assessment in these countries) and to support local insurance industries. If your buyer's country mandates CIF, you must comply regardless of your commercial preference.

Technically yes, but ICC and most trade experts recommend against it. For containerised sea freight, CIP is the appropriate term — it applies to all modes (including multimodal) and provides better all-risk insurance. Using CIF for containers creates the same risk-transfer ambiguity as FOB: goods are handed over at an inland depot, not at the vessel's side.

CIF stands for Cost, Insurance and Freight. Under CIF, the seller pays for export customs, ocean freight to the named destination port, and arranges minimum cargo insurance for the voyage. However, risk transfers to the buyer when goods are loaded on board the vessel at the origin port — not at the destination. The buyer bears transit risk despite the seller paying for freight and insurance.

A marble quarry in Portugal sells stone slabs on CIF Singapore terms to a construction company. The seller arranges Portuguese export clearance, books ocean freight to Singapore, and takes out ICC C insurance for 110% of the CIF value. Once the stone is loaded on the vessel in Lisbon, risk passes to the buyer in Singapore. The seller provides the bill of lading, commercial invoice, and insurance certificate as shipping documents.

CIF appears in Incoterms 2020 (the current ICC edition, effective 1 January 2020). One important clarification in 2020 is the explicit note that CIF should not be used for containerised cargo — CIP is recommended instead. For CIF, the insurance obligation remained at the minimum ICC C level, while CIP was upgraded to require ICC A (all-risk) cover.

CIF value = cost of goods (ex-works or FOB price) + international freight to the named destination port + insurance premium. For customs valuation in many countries, import duties are calculated as a percentage of the CIF value. Accurately calculating CIF is important to avoid under- or over-declaring value at the customs border.

The buyer handles import customs clearance and pays all import duties and taxes under CIF. The seller's obligation ends at the destination port — after that, the buyer is responsible for port handling, import clearance, duties, and delivery to their premises.

Under CIF, the seller must provide: (1) a clean on-board bill of lading or sea waybill; (2) a commercial invoice; (3) a packing list; (4) an insurance certificate or policy covering the voyage. The buyer needs these documents to take delivery of the goods at the destination port and to clear customs.

CFR and CIF are identical except that under CIF, the seller must arrange and pay for minimum cargo insurance (Institute Cargo Clauses C) for 110% of the contract value. Under CFR, insurance is the buyer's responsibility. If the buyer has their own open cargo cover policy, CFR lets them apply their own terms; CIF is convenient when the buyer prefers the seller to handle insurance.

Yes. The seller's minimum obligation under CIF is ICC C cover for 110% of value. If the buyer requires broader cover — for example, all-risk ICC A — they can request this in the sales contract, and the seller is obliged to provide it. Any additional insurance premium cost should be factored into the CIF price.

CIF terms are widely used in Portuguese export trade, particularly for bulk commodities such as cork, wine, olive oil, granite, and wood pulp shipped to non-EU markets. For manufactured goods or any containerised cargo, CIP is the more appropriate modern equivalent, offering all-risk insurance and covering all transport modes.