CIF
Cost, Insurance and Freight
CIF (Incoterms® 2020) is like CFR, but the seller must also buy cargo insurance for the buyer. The risk still passes to the buyer when the goods are loaded on the ship at the port of shipment.
In plain words
The seller pays the sea freight to the named port of destination and buys insurance that covers the goods during the voyage. The insurance is for the buyer's benefit, because the buyer carries the risk at sea. If something happens, the buyer claims from the insurer.
Under CIF, the seller only has to buy minimum cover (Institute Cargo Clauses C), for at least 110% of the contract value. This cover does not include many types of damage. If the buyer wants wider cover, it must be agreed in the contract or bought separately. CIF is only for sea and inland waterway transport; for containers, CIP is often a better match.
Example from real shipping
A buyer imports frozen fish on “CIF Mersin, Incoterms® 2020” terms. The seller pays the freight and buys minimum insurance. When the fish arrives, the buyer finds damage caused by a reefer failure. Minimum cover does not include this kind of damage, so the buyer learns to ask for wider cover next time.
Related terms
- CFRUnder CFR (Incoterms® 2020), the seller pays the sea freight to the named port of destination. But the risk passes to the buyer earlier, when the goods are loaded on the ship at the port of shipment.
- FOBUnder FOB (Incoterms® 2020), the seller clears the goods for export and loads them on board the ship chosen by the buyer, at the named port of shipment. The risk passes to the buyer when the goods are on board.
- Landed costLanded cost is the total cost of getting a product to your door: the price of the goods plus freight, insurance, duties, taxes, and all other fees on the way.
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Request a QuoteThis glossary is general information, not legal or customs advice. Rules, fees, and practice can differ by carrier, port, and country.