GLOSSARY
CIP (Carriage and Insurance Paid To)
Incoterms 2020 rule where the seller pays carriage and insurance to a named destination, with risk transferring at first carrier.
CIP is an Incoterms 2020 rule where the seller delivers goods to a carrier, pays freight and insurance to a named destination, but risk transfers to the buyer when goods reach the first carrier.
Why it matters
Under Incoterms 2020, CIP now requires the seller to obtain insurance complying with Institute Cargo Clauses (A), the highest standard coverage. This was a significant upgrade from Incoterms 2010, which only mandated minimum (C) coverage. Buyers relying on CIP shipments receive broader protection against loss or damage without negotiating separate insurance terms.
For operators, confirm your contracts explicitly reference "Incoterms 2020" to lock in the (A) coverage requirement. The ICC publishes the official rules at https://iccwbo.org/business-solutions/incoterms-rules/.