Incoterms CIF: Cost, Insurance and Freight
Named Place Requirement: Port of Destination
Applies to:Sea and inland waterway only
The seller is obligated to secure insurance for the buyer, but only for minimum coverage.
CIF Incoterm Obligations
- Goods, commercial invoice and documentation
- Export packaging and marking
- Export licenses and customs formalities
- Pre-carriage and delivery
- Loading charges
- Delivery at named port of destination
- Proof of delivery
- Cost of pre-shipment inspection
- Minimum insurance coverage
- Payment for goods as specified in sales contract
- Discharge and onward carriage
- Import formalities and duties
- Cost of import clearance pre-shipment inspection
The CIF rule is identical to CFR except in one aspect. Even though the risk transfers to the
seller upon loading the goods on board the vessel, in CIF the seller is obliged to take out
the minimum level of insurance cover for the buyer’s risk.
This will be at Institute Cargo Clauses (C) or similar. The seller must give the buyer the
insurance policy or a certificate under a policy — this document usually evidences the
seller as the party being insured so it must then blank endorse the document on the back
to allow the buyer to claim should it so require.
Any excerpts quoted from the Incoterms® 2020 rules are the copyright of the International Chamber of
Commerce. Source: ICC website. The full text of the 2020 edition of the Incoterms rules is available at
https://2go. iccwbo.org/. The word “Incoterms” is a registered trademark of the International Chamber of Commerce.