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Glossary · Trade terms
What is CIF (Cost, Insurance and Freight)?
An Incoterms rule where the seller pays freight and minimum insurance to the destination port, but risk passes to the buyer once goods are loaded in China.
With CIF, the seller arranges and pays for ocean freight to the named destination port, for example CIF Los Angeles, and buys cargo insurance for the buyer. The catch is timing: risk passes to the buyer when the goods are loaded on board in China, even though the seller paid the freight.
Incoterms 2020 only requires the seller to buy minimum cover under CIF (Institute Cargo Clauses C), which excludes many common types of loss. Buyers who want broader cover must agree it in the contract or insure the cargo themselves. Beato includes cargo insurance on every shipment it handles.
CIF also leaves the buyer paying destination costs the seller does not cover, such as terminal handling, customs entry, duties and delivery from the port. When a CIF price looks low, ask what the seller's forwarder will bill at the US end.
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