CIP
CIP (Carriage and Insurance Paid To) is the same as CPT — the seller pays carriage to a named destination and risk passes to the buyer at the first carrier — with the addition that the seller must arrange insurance for the goods in transit to the destination, for the buyer's benefit.
A key Incoterms 2020 change: under CIP the seller must provide higher (all-risk) insurance cover — Institute Cargo Clauses (A) — whereas CIF (its maritime counterpart) still only requires the minimum (C) cover. CIP is the multimodal equivalent of CIF and can be used with any transport mode.
CIP is the buyer-friendly C-term: the seller pays both freight and insurance to the destination, and under Incoterms 2020 that insurance must be broad all-risk cover. For a buyer who wants transit risk covered without arranging it themselves, CIP shifts that burden cleanly to the seller.
What insurance level does CIP require?
Under Incoterms 2020, the higher all-risk cover — Institute Cargo Clauses (A) — unless the parties agree otherwise.
How does CIP differ from CIF?
CIP works for any transport mode and requires all-risk (A) cover; CIF is sea/inland-waterway only and requires just minimum (C) cover.