CIF (Cost, Insurance and Freight) is one of the four sea-and-inland-waterway-only Incoterms and the sea-mode counterpart to CIP. The seller contracts and pays for ocean freight and marine insurance to the named destination port. Risk transfers to the buyer when the goods are on board the vessel at the port of shipment.
Under CIF, the seller must:
- Contract and pay for ocean carriage to the named destination port
- Procure marine insurance covering the buyer's risk from the port of shipment to the destination port
- Insure for at least 110% of the contract value
- Deliver the goods on board the vessel
- Handle export clearance
Under CIF, the buyer must:
- Bear the risk of loss from the moment the goods are on board the vessel at origin
- Pay unloading charges (unless included in freight)
- Handle import clearance and pay duties at destination
- Receive the insurance policy or certificate from the seller and pursue claims directly with the insurer if cargo is lost or damaged
Insurance cover level — Under both Incoterms 2010 and Incoterms 2020, CIF requires only Institute Cargo Clauses (C) — a limited-perils policy covering things like fire, sinking, and collision but not all losses. This is a key inconsistency with CIP, which under Incoterms 2020 requires the broader Institute Cargo Clauses (A). Buyers of high-value cargo under CIF often need to purchase "difference in conditions" cover.
CIF is among the most commonly cited Incoterms in commercial contracts, partly because it produces a landed-port price that maps cleanly to customs valuation — the CIF-port-of-import value is often very close to the dutiable value used for U.S. import duty calculation.