Incoterms 2020
CIF, Cost, Insurance and Freight
CFR plus insurance, but only the minimum level of cover. Most buyers assume CIF protects them properly, and most of the time it does not.
- Group
- C
- Mode
- Sea and inland waterway only
CIF works like CFR with one addition: the seller must arrange marine insurance for the buyer’s benefit. Risk still passes on board at the port of shipment, and the seller still pays the freight to the destination port.
The catch is the level of cover. CIF only requires Institute Cargo Clauses C, which is a named perils policy covering a short list of major events such as fire, stranding and collision. It does not cover ordinary water damage, theft, or most handling damage. Buyers routinely assume CIF means they are insured and discover otherwise when a claim is refused. If you want real protection, agree CIP, which requires all risks cover, or arrange your own policy.
The seller is responsible for
- Deliver the goods on board at the port of shipment
- Clear the goods for export
- Contract and pay for carriage to the named destination port
- Arrange marine insurance at Clause C level for 110 percent of the value
- Provide the bill of lading and the insurance policy
The buyer is responsible for
- Bear risk from the moment the goods are on board at origin
- Pay destination terminal and unloading charges where applicable
- Handle import clearance, duty and taxes
- Consider additional insurance, because Clause C is narrow
Risk transfers
When the goods are on board at the port of shipment.
Costs transfer
At the named destination port, with minimum insurance covering the gap.
Best used for
Bulk commodity trades where Clause C cover is genuinely adequate.
Watch out for
Clause C is a named perils policy, not all risks. For containerised or high value cargo agree CIP or buy your own all risks cover.
Related services
Tell us what you need to move.
Send the supplier city or port of loading, the volume and weight, and the date the goods are ready. We will come back with a landed cost and a realistic transit time, usually within one working day.