Incoterm: CIF (Cost, Insurance, and Freight)

Similar to CFR, except that the seller is required to obtain insurance for the goods while in transit to the named port of destination.

This incoterm, CIF (Cost, Insurance, and Freight), is broadly similar to the CFR term, with the exception that the seller is required to obtain insurance for the goods while in transit to the named port of destination. CIF requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the contract. The seller must also provide the necessary documents – the invoice, the insurance policy, and the bill of lading – to obtain the goods from the carrier or to assert claim against an insurer to the buyer. These three documents represent the cost, insurance, and freight of CIF. The seller's obligation ends when the documents are handed over to the buyer, and the buyer pays the agreed price. CIF applies to ocean or inland waterway transport only; for all other modes of transport use CIP.