CIF and CIP are structurally similar — seller pays freight and insurance to the named destination — but they differ on transport mode and, critically, on the required insurance level.
| CIF — Cost, Insurance and Freight | CIP — Carriage and Insurance Paid To | |
|---|---|---|
| Transport mode | Sea/inland waterway only | Any mode |
| Risk transfers | On board the vessel at the port of shipment | When goods are handed to the first carrier at origin |
CIF is restricted to sea and inland waterway transport, with risk transferring once goods are on board the vessel, and only requires minimum cargo insurance. CIP works for any transport mode, with risk transferring at the first carrier handover (which can be much earlier in the journey for multimodal shipments), and — since the Incoterms 2020 update — requires all-risk insurance (Institute Cargo Clauses A), a materially higher coverage standard than CIF.
You're shipping bulk or break-bulk cargo by sea specifically, and minimum insurance coverage is acceptable for the goods in question.
You're shipping via any mode other than sea-only vessel transport, or you want the stronger all-risk insurance protection that CIP requires as standard.
CIP. Since the Incoterms 2020 revision, CIP requires the seller to arrange all-risk insurance (Institute Cargo Clauses A), while CIF still only requires minimum coverage (Institute Cargo Clauses C). This was a deliberate change to reflect that CIP is often used for higher-value or more complex multimodal shipments.
Yes — CIP works for any transport mode including multimodal shipments that combine sea, road and air legs, unlike CIF which is restricted to pure sea or inland waterway transport.
Cost — minimum insurance under CIF is cheaper than the all-risk insurance CIP requires, and for straightforward, lower-value bulk sea shipments, minimum coverage may be entirely adequate, making CIF the more cost-effective choice.
Compare DHL, UPS, FedEx, DPD and GLS rates in seconds — whichever Incoterm you're using.
Get a Free Quote →