CIF, Cost Insurance and Freight

CIF, Cost Insurance and Freight (insert named port of destination) is an IncoTerm whereby the use of this IncoTerm is restricted to goods transported by sea or inland waterway. The IncoTerm Cost, Insurance and Freight is very similar to Cost and Freight. However, in CIF the seller is obligated to arrange a sea Transport insurance. The seller takes out an insurance policy and pays the insurance premium; it is important that the buyer realizes that the seller is only obligated to provide insurance with minimum coverage. CIF is one of the most widely used IncoTerm because the costs and risks are quite evenly divided between both parties. Both the buyer and the seller are responsible for the parts in their “own” country. This makes the communication for insurance and customs formalities for example a lot easier. Source International Chamber of Commerce (ICC).

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