CIP stands for “Carriage and Insurance Paid to.” It’s one of the International Commercial Terms (Incoterms) published by the International Chamber of Commerce (ICC), which define the responsibilities of buyers and sellers in international trade contracts.
In CIP, the seller delivers the goods and transfers the risk to the buyer. The seller is responsible for arranging and covering the carriage costs required to transport the goods to the specified destination.
With CIP, the buyer assumes risk once the carrier takes possession. CIP shares similarities with CPT, with the distinction that the seller must procure minimum insurance coverage for the goods during transit.
It’s essential for parties involved in international trade to clearly define the specific requirements and terms of the CIP arrangement in their contracts to ensure the smooth execution of the transaction.