When you’re shipping internationally, balancing cost, control, and coverage is crucial. That’s where CIP (Carriage and Insurance Paid To) comes in—a smart Incoterm that offers peace of mind with both transportation and insurance included.

Let’s unpack how CIP works, when to use it, and how a logistics partner like SailOn Logistics helps you ship smarter and safer.

What Does CIP Mean?

CIP (Carriage and Insurance Paid To) means the seller pays for both the transportation and insurance of the goods to a named destination. However, risk transfers to the buyer as soon as the goods are handed over to the first carrier.

In short:

• Seller pays for freight and insurance

• Buyer takes on risk from the first carrier onward

• Works across all modes of transport

Key Responsibilities Under CIP

Here’s how responsibilities are split:

Seller’s Responsibilities:

• Pack and prepare goods for export

• Handle export documentation and clearance

• Deliver goods to the first carrier

• Pay for international freight

• Provide insurance coverage for transit (minimum ICC A/Cargo Clauses A level)

Buyer’s Responsibilities:

• Risk from the point goods are handed to the first carrier

• Handle import clearance and duties

• Manage final delivery at destination

Insurance is a key advantage of CIP—it gives buyers coverage without extra effort.

When Should You Use CIP?

CIP is ideal when:

• Buyers want goods insured during transit

• Sellers have access to better insurance and freight rates

• Shipments involve multimodal transport (e.g., rail + air)

• Buyers are located far from ports or inland

This Incoterm is especially useful for high-value goods or fragile items shipped internationally.

Pros and Cons of CIP

Advantages for Buyers:

• Freight and insurance handled by the seller

• Reduced administrative burden

• Ideal for risk-averse or new importers

Challenges for Buyers:

• Risk transfers early despite seller-paid insurance

• Buyers must understand the limits of the provided coverage

• Still responsible for final leg and import process

Common Misconceptions About CIP

“The seller is responsible until the goods arrive.”

→ Incorrect. Risk transfers to the buyer once the goods are handed to the first carrier, even though the seller pays for transit and insurance.

“Insurance covers everything.”

→ Not always. The seller is only obligated to provide minimum coverage unless otherwise agreed. Buyers should review insurance details.

“CIP only applies to sea freight.”

→ False. CIP works with any mode of transport, including air, road, rail, and containerized sea freight.

How CIP Compares to Other Incoterms  

How SailOn Logistics Simplifies CIP Shipments

CIP offers great flexibility and peace of mind—but only when it’s executed right. At SailOn Logistics, we ensure both sellers and buyers benefit fully from this Incoterm.

Here’s how we help:

• Sourcing optimal insurance policies with extensive cargo coverage

• Coordinating with trusted carriers for smooth handover and freight

• Transparent documentation outlining risk transfer points

• Real-time shipment tracking from dispatch to delivery

• Expert advice on when to choose CIP vs. CPT or CIF

With SailOn, you don’t just ship—you ship smart, with cost-efficiency and risk mitigation built in.

Final Thoughts

CIP is a powerful Incoterm that balances seller-paid freight and insurance with buyer-handled import logistics. It’s ideal for global shipments where security matters, but it requires clarity around risk transfer and insurance terms.

Whether you’re a seasoned exporter or a startup importing goods for the first time, SailOn Logistics makes CIP shipping simple, reliable, and safe.

Get in touch today to explore how we can tailor your Incoterm strategy for stress-free international trade.