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Incoterms & Delivery Terms

CIF

Also known as: Cost, Insurance and Freight

Under Cost, Insurance and Freight the seller pays the cost of the goods, contracts and pays for ocean freight to the named destination port, and procures a minimum level of marine cargo insurance for the buyer's benefit. Despite the seller paying freight and insurance to destination, the risk of loss still passes to the buyer at the port of shipment once the goods are on board — a subtlety that surprises many first-time importers. CIF is a maritime term suited to bulk cargo; its containerized equivalent is CIP, which extends the same cost-and-insurance logic to any mode of transport.

The JFS takeLicensed customs broker · Filer 82G

The trap in CIF is that the seller pays freight and insurance to your port, yet risk passed to you at theirs. Buyers read "insurance included" and stop reading. What they have bought is Institute Cargo Clauses (C): a short list of named catastrophes, not damage and not theft.

Where it matters for compliance

  • CIF price includes international freight and insurance, which are generally not dutiable on a U.S. entry — but they must be identified on the invoice to be deducted.
  • A lump-sum CIF price with no breakdown invites CBP to assess duty on the whole figure.

Related terms

CFRCost and Freight obliges the seller to pay for the goods and the ocean freight to bring them to the named destination port, but not to arrange insurance.CIPCarriage and Insurance Paid To is a multimodal Incoterm under which the seller contracts and pays for carriage to the named destination and also procures transport insurance for the buyer's benefit, while risk transfers to the buyer much earlier, when the goods are handed to the first carrier.FOBFree On Board is a maritime-only term under which the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment and clears them for export.

Reviewed by a licensed customs broker. Definitions are general information, not legal or customs advice for a particular shipment. Duty rates, tariff programs and agency requirements change frequently.