Incoterms Rules
CIF — Cost, Insurance and Freight
CIF (Cost, Insurance and Freight) extends CFR terms by including mandatory cargo insurance provided by the seller. However, the insurance usually offers minimal coverage. As with CFR, the risks transfer after loading onto the vessel, but the buyer receives basic protection against potential losses during transportation.
Who does what
| Transport | Sea and inland waterway |
|---|---|
| Export clearance | Seller |
| Import clearance | Buyer |
| Main carriage paid by | Seller |
| Insurance | Seller, minimum cover |
| Risk passes to the buyer | When the goods are loaded on board the vessel at the port of shipment |
When to use it
Like CFR, with the seller buying insurance for the buyer's benefit. Widely used for bulk grain sold to buyers who want a price delivered to their port.
What to watch
The seller's insurance is at the minimum level, Institute Cargo Clauses (C). A buyer that needs wider cover should agree it in the contract or insure itself. As in CFR, risk passes on board at the port of shipment, not at destination.