CIP is broadly similar to CPT. However, the seller is required to insure the goods in transit and to pay the transportation itself.
The seller clears the goods for export and delivers them to the carrier or place of destination as instructed by the buyer. The seller is responsible for the transportation costs of the items to the designated place of destination.
The risk is transferred to the buyer at the defined place of shipment.
In one of the most significant changes under Incoterms 2020, CIP requires the seller to purchase a higher level of insurance. This level of coverage is appropriate for containerised goods: 110% of the contract value under Institute Cargo Clauses (A) of the Institute of London Underwriters. Previously the minimum insurance was applicable under Institute Cargo Clauses (C).
