Incoterms® 2020Modes: Sea, Inland Waterway
CIF - Cost, Insurance and Freight
CIF (Cost, Insurance and Freight) is one of the 11 rules published by the ICC in Incoterms® 2020. Risk passes on board vessel at port of loading. Insurance is mandatory under CIF: the seller must arrange Institute Cargo Clauses (C) - named perils only.
Best fit for LC
Risk transfer point
On board vessel at port of loading
Who does what under CIF
| Obligation | Party |
|---|---|
| Export Packaging | Seller |
| Inland Transport (Origin) | Seller |
| Export Clearance | Seller |
| Loading on Vessel | Seller |
| Main Carriage (Freight) | Seller |
| Insurance | Seller (min ICC-C) |
| Destination Charges | Buyer |
| Import Clearance | Buyer |
| Import Duty | Buyer |
Insurance obligation
Under CIF, the seller must procure marine cargo insurance covering at least 110% of the invoice value in the currency of the contract, per UCP 600 Article 28(f). Minimum clause: Institute Cargo Clauses (C) - named perils only.
Watch outs
- CIF minimum insurance is ICC (C) - named perils only. Does not cover theft, water damage, or contamination.
- For high-value goods specify Institute Cargo Clauses (A).
- Coverage must be min 110% of CIF value per UCP 600 Art. 28(f).
Under a letter of credit
Best fit for LC transactions. Natural document set: Invoice + B/L + Insurance Certificate.