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Cost Insurance and freight CIF


Maritime and Inland Waterway transport only

Cost Insurance Freight

Here the Seller is liable for every cost up to the port of destination. In other words, the Seller has to pay for pre-carriage transport costs, Terminal Handling charges (depending on liner terms), main transport costs and insurance costs.

However, the transfer of risks (loss and damage) occurs as soon as the goods are on board the vessel at the port of shipment (departure).

Moreover, the Seller is required to purchase cargo insurance with a minimum cover (Clause C of the Institute Cargo Clauses LMA/ IUA), from an insurance company of good reputation. Note that the buyer should be entitled to make a claim directly.

Any additional coverage requested by the buyer (riots, strikes, war etc.) is at his own expense.

The selected insurance must cover 110% of the value declared within the sales contract and must be denominated in the same currency.

In addition, the Seller is liable for the export custom clearance formalities (export licence for instance).

Moreover, any pre-shipment inspection required by law in the seller’s country, is at the seller’s expense.

The Seller must assist the Buyer for obtaining documents that might be required for the importation.

Note that the related costs engendered by such assistance are at the expense of the buyer.

Furthermore, the Seller has the obligation to provide the transport documents needed by the buyer for claiming the goods from the carrier in the port of destination.

Overall, the buyer is liable for import custom clearance (Taxes, duties, VAT), terminal handling costs at the port of arrival (depending on liner terms) and post-routing transport costs.

Usual Documents required:

  • Commercial Invoice
  • Documents as agreed in the contract
  • Insurance Policy (where the buyer should be entitled to claim)
  • Transport documents:
    1. Dated in line with agreed period for shipment
    2. Clean Bill of lading with the mention “freight prepaid” and full set of originals when issued in negotiable form


Make sure that both, the port of departure (transfer of risk from seller to buyer) and the exact point in the port of arrival are precisely specified (paid by the seller).

When should I use the Cost Insurance and Freight (CIF) Incoterms rule?

This Incoterm is recommended when the seller trades produces and raw materials (such as commodities for instance) and where he has an easy access to bulk cargo (dry or liquid)

However for containerised goods, usually handed over to the carrier before the loading aboard the vessel, CIF is not fit for purpose and Carriage insurance paid to (CIP) rule should be considered instead.