What is CIF (Cost, Insurance and Freight)?
Cost, Insurance and Freight (CIF) is a sea and inland waterway Incoterms rule under which the seller pays the cost of the goods, freight to the named destination port, and marine insurance for the voyage. Crucially, risk still passes to the buyer when the goods are on board at the load port.
At a glance
| Term | CIF |
|---|---|
| Definition | Cost, Insurance and Freight — seller pays freight and insurance to destination port. |
| Category | Logistics & delivery |
| Related terms | Incoterms, EXW (Ex Works), FOB, DDP, B/L (Bill of Lading), Laycan, Demurrage |
What it is used for
CIF gives the buyer a single delivered price to their port without arranging shipping, which is why it is common where the seller has better freight rates or the buyer lacks chartering capability.
Key points
- The seller contracts and pays for carriage to the named destination port and clears the goods for export.
- The seller must provide marine insurance — under Incoterms 2020 the minimum is Institute Cargo Clauses (C).
- Risk transfers on board at the port of shipment, despite the seller paying to destination.
- Import clearance, duties and onward delivery are the buyer's responsibility.
What to watch for
- The split between cost and risk is the single most misunderstood point in commodity trading. A CIF buyer carries the voyage risk.
- Minimum ICC(C) cover is narrow. Buyers of high-value cargo should require ICC(A) in the contract.
- CIF is for conventional sea freight, not containers — CIP is the container equivalent.
Frequently asked questions
If the cargo is lost at sea under CIF, who bears it?
The buyer bears the risk, because risk passed on board at the load port. The buyer claims under the insurance policy the seller was obliged to provide.
What insurance must the seller provide under CIF?
At least Institute Cargo Clauses (C) for 110% of the contract value, in the contract currency, unless the parties agree wider cover.
What is the difference between CIF and CFR?
CFR is identical except the seller has no obligation to insure. Under CIF the seller must provide cover.
Related terms
Lodfy verifies every company on the platform — registration, ownership and sanctions screening — before they can trade.