CIP – Carriage and Insurance Paid To (…named place of destination): “Carriage and Insurance paid to…” means that the seller (exporter) delivers the goods to the carrier nominated by him but the seller (exporter) must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer (importer) bears all risks and any additional costs occurring after the goods have been so delivered. However, in CIP the seller (exporter) also has to procure insurance against the buyer’s risk of loss of or damage to the goods during the carriage.
Consequently, the seller (exporter) contracts for insurance and pays the insurance premium. The buyer (importer) should note that under the CIP term the seller (exporter) is required to obtain insurance only on minimum cover. Should the buyer (importer) wish to have the protection of greater cover, he would either need to agree as much expressly with the seller (exporter) or to make his own extra insurance arrangements.
Carrier means any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport, by rail, road, air, sea, inland waterway or by a combination of such modes. If subsequent carriers are used for the carriage to the agreed destination, the risk passes when the goods have been delivered to the first carrier. The CIP term requires the seller (exporter) to clear the goods for export.
This term may be used irrespective of the mode of transport including multimodal transport.