CIF — Cost, Insurance and Freight
CFR plus a minimum insurance policy the seller buys for the buyer's benefit. Risk still passes at origin.
- Group
- C — Main carriage paid
- Transport mode
- Sea and inland waterway only. Delivery is measured against a vessel, so it does not describe a container handover.
- Named place
- The port of destination the seller has paid the freight and insurance to.
- Main carriage paid by
- Seller
- Risk passes
- On board at the origin port
- Export clearance
- Seller
- Import clearance and duties
- Buyer
- Seller must insure
- Minimum Institute Cargo Clauses (C)
- Unloading at destination
- Buyer.
CIF is CFR with one addition. The seller must take out cargo insurance covering the buyer's risk during the main carriage, and hand over the policy or certificate. Risk passes on board at the origin port, exactly as under CFR. So the buyer still carries the risk. What the buyer gets is a policy to claim on.
The required cover is the minimum: Institute Cargo Clauses (C), a narrow wording that only covers listed events. It covers major events such as fire, stranding, sinking and collision. It does not cover theft, non-delivery, ordinary water damage, or most handling damage. Buyers often assume CIF means fully insured, and find the gap when they make a claim.
Incoterms 2020 raised CIP's insurance requirement to Institute Cargo Clauses (A), all risks. It deliberately left CIF's at (C), because CIF is used for bulk commodity trades where (C) is the normal cover. So the two insurance rules are now different, and the difference is easy to miss.
If you need proper cover under CIF, state a higher level of cover clearly in the sales contract. The default is ICC (C). A container stolen from a yard is not covered under ICC (C).
Always write the rule with its named place and the version — CIF [named place], Incoterms 2020. The rule says nothing about when ownership transfers; that is for your sales contract.