Carriage and Insurance Paid To (CIP)

What is Carriage and Insurance Paid To (CIP)?

'Carriage and insurance Paid To' is a term that is used when a seller pays the freight charges and the insurance when it comes to delivering goods to the buyer at an agreed location. Under this, the seller has to insure the deliverable goods for 110% of the value of the concerned contract.

If the buyer wants additional insurance for the goods, he/she should make the provision. Please note that any damage or loss of goods that are being transported will transfer from the seller to the buyer as soon as the goods reach the buyer.

Example of CIP

If Apple in the USA has to deliver goods to an online shopping website in India, then Apple is responsible for the freight charges and Insurance Coverage to deliver the goods at the agreed location.

Once the delivery has taken place, Apple in the USA has completed its job and the whole responsibility is now transferred to the concerned online shopping website in India. The transportation could be through the accepted mode of transport such as road, rail, inland waterway, sea, air or a combination.

Other Coverage Under CIP

It is important that the seller insures the goods. However, the buyer should also arrange for additional insurance to be on the safe side. Not doing so can lead to an inevitable loss if the shipment is damaged through an accident, etc.

The buyer can ask the seller to provide extra insurance coverage. This can be decided upon based on the negotiation between the buyer and the seller at the time of deciding about the delivering of the goods.