GLOSSARY
CIF (Cost, Insurance and Freight)
Incoterm for sea/inland-waterway transport only. Seller pays cost, freight, and minimum marine insurance to the named destination port. Risk transfers when goods are loaded at origin.
CIF (Cost, Insurance and Freight) is one of two Incoterms 2020 reserved for sea or inland-waterway shipments (the other is CFR). The seller is responsible for the contract of carriage to the named destination port and for taking out a minimum-cover marine cargo insurance policy in the buyer's name. Risk transfers from seller to buyer when goods are loaded onto the vessel at origin — not at destination.
Why it matters
CIF gets misused frequently for containerised cargo where the goods are loaded at the seller's premises, not the vessel; in those cases CIP (the multimodal equivalent) is correct. The split between cost transfer (destination) and risk transfer (origin) is what distinguishes CIF from FOB and what often surprises buyers when there's a casualty in transit.
Related terms
- CFR
- CIP (multimodal)
- FOB
- Incoterms 2020