Carriage and Insurance Paid to
CIP (named place of destination) Incoterms 2010
- The seller delivers the goods to the buyer, when he hands over the goods to the carrier named by him at the place of loading at the agreed time of delivery.
- The seller pays the costs and bears the risk of loss of or damage to the goods until he has delivered them.
- The seller contracts for carriage and pays the freight to the agreed destination.
- The seller insures the goods on behalf of the buyer during transit.
- The seller takes care of export formalities.
- The buyer takes delivery of the goods when the seller hands them over to the carrier at the place of loading at the agreed time of delivery.
- The buyer receives the goods from the carrier at the named place of destination.
- The buyer pays the costs except freight and bears the risk of loss of or damage to the goods after the delivery.
- The buyer takes care of formalities for the import of the goods and for their transit through any country.
CIP is similar to CPT, except that the seller shall insure the goods during transit on behalf of the buyer.
CIP defines a custom of trade where the seller delivers the goods to the buyer when he hands them over to the carrier at the place of loading. The term CIP has got two critical points. They are the point of delivery and the point of destination. The seller contracts for carriage with the carrier which he has chosen for the carriage of goods from the place of loading chosen by the seller to the agreed place of destination and pays the freight to that destination. The delivery of the goods takes place at the place of departure, when the seller hands over the goods to the carrier.
The buyer receives the goods from the carrier at the place of destination agreed by the seller and the buyer.
The seller pays the freight. The buyer is responsible for all costs after delivery except the freight unless those costs are included in the freight. Costs of discharge at the destination belong to the buyer, unless they are included in the contract of carriage, in which case they are to be paid by the seller.
The delivery from the seller to the buyer is similar to FCA, except that according to CIP the seller contracts for carriage. The seller may hand over the goods to the carrier either at his premises or at some other place, e.g. at the terminal of the carrier.
From the carrier’s point of view, the contracting partner of the carrier is the seller. The contract should cover the transport from the place of departure to the agreed destination.
The risk transfers from the seller to the buyer at the moment of delivery. Because the buyer bears the risk after the delivery, the buyer should present the claim for possible transport damages to the insurance company named by the seller.
The risk for delay in carriage of goods is not included in the ordinary transport insurance. The buyer should present the claim to the carrier.
The seller must obtain a cargo insurance on behalf of the buyer with an insurance company of good reputation from the place of delivery to the place of destination. The insurance covers the risks of loss of or damage to the goods or General Average. The insurance must be contracted at least with minimum terms. In most cases goods are insured with widest possible terms. The insured value is at least the CIP-value + 10 %.
The seller is responsible for the export formalities. The import formalities and possible formalities during transit are on the buyer.
The seller and the buyer may agree, except on the place of destination, also on the place of delivery, although it is no common.
CIP can be used with all modes of transport, especially in container traffic. Containers are often delivered from place of departure to the place of destination. Containers can be handed over to the carrier at any place and they can be transported with any mode of transport.