What is CIP Incoterm?
Under CIP (Carriage and Insurance Paid to), the seller must secure “all-risk” insurance for 110% of the contract value, in compliance with the Institute Cargo Clauses (A), which provide protection during transit. The risk transfers to the buyer as soon as the goods are handed over to the first carrier.
Is CIP a good Incoterm for my Shipment?
Under CIP, risk transfers to the buyer as soon as the goods are handed over to the first carrier, even though the seller covers transportation and insurance costs up to the named place. This means the buyer assumes responsibility for the goods during transit, even before receiving them. You also have limited control over insurance and transportation options because the seller arranges this.
This could lead to potentially higher costs and higher risk.