What are Incoterms?

Before explaining each individual Incoterm, we first need to get to grips with what Incoterms actually are. Simply put, ‘Incoterms’ are International Commercial Terms, 11 rules for the purpose of making who is responsible for what during an international transaction crystal clear. Accepted globally and becoming a requirement in international trade, they take out the risk of a “lost in translation” misunderstanding and in 3 simple letters (bar the odd caveat) it pinpoints exactly where the burden of responsibility lies and transfers from buyer to seller regarding the costs, jobs and risks involved. It leaves little to no room for confusion and every party involved knows exactly where they stand.

Today we look at CIP…



CIP – Carriage & Insurance Paid To

CIP acts an alternative to CPT should the buyer wish for the seller to insure the goods whilst being transported. There is no obligation on the seller to what level of insurance they need to get and can opt to go for the minimum requirements possible to ensure the goods are covered. Should the buyer wish for something more comprehensive then they should look into arranging the insurance themselves.

Transfer of risk

When the goods have been handed over to the carrier.


Want to learn more about INCOTERMS right away? then check out our Logitics Encyclopedia!

“I love what I see, help me transport cargo!”

“I love what I see, help me transport cargo!”