12 tips to Seller on CIP terms of Delivery


The information provided here is part of Export import business Course online

Seller’s obligations under CIP terms, a quick reference

Before getting in to the tips for seller under CIP terms of delivery, an easy and quick reference about CIP terms which I had mentioned in a separate article in same web blog is given below for easy understanding. 

What is CIP term?

12 tips to Seller on CIP terms of Delivery copy
CIP term means ‘Carriage and Insurance paid to’ (named destination).  The seller makes all required arrangements at his on cost and risk to deliver cargo at first carrier of goods nominated by him.  Apart from the cost of carriage up to the destination mentioned in CIP terms, seller arranges insurance up to the said destination at his own cost.  The liability on risk passes to buyer once after delivery of goods to first carrier, if more than one carrier is involved under CIP terms. The buyer meets all expenses from the destination point to take delivery of goods to his premises.

Let us go deeply in to the duties and responsibilities of seller under CIP terms of delivery.    I hope these tips help sellers to know the term CIP to make easier to understand.

01.    Under CIP terms, the seller delivers goods as per quality specified by the buyer mutually agreed as per contract of sale.

02.    Under CIP terms, all required documents for buyer need to be supplied by seller.  Some of these documents includes commercial invoice, packing list, certificate of origin, carriers receipt of goods like Lorry receipt, Railway receipt, Airway bill, Bill of Lading, copy of Insurance etc. whoever is applicable. All such documentation expenses are on account of seller under CIP terms of delivery.

03.    Proper packing of goods needs to be done by seller in CIP terms.

04.    Each package need to be marked properly by seller for easy transportation to final destination.

05.    Transportation and customs clearance procedures are under the responsibility of seller under CIP terms.  These customs formalities are to be followed by seller with his own risk and expenses.  All required licensing procedures and formalities in this effect to be arranged by seller under CIP terms.

06.    Under CIP terms, the freight and other charges (carriage) up to the named destination contracted has to be paid by the seller. 

07.    The seller nominates carrier up to the named destination under CIP terms.

08.    The liability on risk of goods ends, once after delivering goods to the carrier.

09.    If more than one carrier is involved in a CIP terms, the obligation of seller on risk of goods fulfills immediately up on delivery of goods to the first carrier.

10.    The seller arranges insurance up to the destination mentioned in CIP terms.

11.    In a CIP terms of delivery, if additional insurance is required to be covered by the buyer other than minimum insurance cover arranged by seller, the seller has to provide necessary information to buyer in accordance with the minimum coverage and additional details if any to help buyer to provide such additional insurance cover.

12.    Under CIP terms, the unloading expenses at destination point mentioned in contract falls under seller’s account.



Detailed articles about Inco Terms of Delivery under export and import of International business  have been mentioned in  separate category – INCO TERMS – in this web site.  You can click here to read.

Have you satisfied with the above simplified  tips on CIP terms of delivery?  Would you like to opine more on CIP terms?  Comment below:

The above information is a part of Online international business guide course

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Sally: at what point; can the seller invoice the customer under each of the terms listed below.: cip ____________ cif ____________ dap ____________. i.e. a> as soon as it leaves the sellers dock... or b> as soon as it is delivered to freight forwarder c> as soon as it is boarded on Vessel or Plane if air d> as soon as it arrives at destination..

Ravinder Kumar Sharma: Hi, We are going to buy machines from KOREA under high seas sales. Is EPCG scheme benefit will be applicable in HSS purchase? We will be final buyer and distributor will be in between with whom we shall have the high seas purchase agreement.

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