It means the agreed price already includes the goods, carriage to the named destination and cargo insurance. The seller contracts both services, but the risk of loss or damage passes to the buyer on delivery to the first carrier.
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CIP Incoterm in Brazil: carriage and insurance paid and the minimum cover required
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The CIP Incoterm (Carriage and Insurance Paid To) requires the seller to contract and pay for carriage to the agreed destination and for cargo insurance in the buyer's favour. Risk, however, passes to the buyer when the goods are handed to the first carrier, still in the country of origin.
That gap between who pays and who carries the risk sits behind the most common CIP disputes. The buyer reads "insurance paid" and relaxes; the seller buys the cheapest policy available. Then the cargo arrives damaged. Only at that point do both sides realise they understood different things.
How does CIP work in practice?
Under CIP, delivery happens when the seller hands the goods to the carrier it contracted, at the agreed place and point. From then on, loss or damage is the buyer's problem, even though carriage and insurance to destination are already paid. The destination named in the contract ("CIP Lisbon") marks where the cost ends, not where the risk ends.
Picture a factory in Campinas, in São Paulo state, selling parts to a customer in Portugal on "CIP Lisbon, Incoterms 2020" terms. The factory trucks the cargo to the Viracopos airport terminal, clears it for export and hands it to the carrier. Done: risk has changed hands. The seller still pays the flight and the insurance to Lisbon, and the buyer handles import clearance in Portugal.
CIP works for any mode: air, road, rail, sea or a combination. With more than one carrier on the route, delivery happens at the first one. Always. That is why the rule suits air cargo and containers that leave the factory by truck. If you are still building your toolkit, the guide to what Incoterms are sets the 11 rules side by side.
What insurance has CIP required since 2020?
Since Incoterms 2020, CIP requires cover at the level of the Institute Cargo Clauses (A), the so-called "all risks" cover, or similar clauses. Under the 2010 version, Clause C was enough, and it covers only a closed list of major events such as sinking, fire and collision. Source: ICC, official Incoterms 2020 page.
According to the ICC Academy, the policy has three practical requirements:
- a sum insured of at least 110% of the contract value, unless the parties agree otherwise;
- cover that runs all the way to the agreed destination, not just to the port or airport of departure;
- a policy or certificate issued in favour of the buyer or another party with an insurable interest in the goods.
In numbers, a US$ 20,000 contract calls for a policy of at least US$ 22,000.
Clause A covers more. It also costs more. If your customer accepts less, write it into the contract. Without that wording, handing over a Clause C policy under CIP breaches the rule. For how cargo policies work on shipments to and from Brazil, see the guide to cargo insurance in Brazil.
What is the difference between CIP and CIF?
CIP and CIF are the only two Incoterms 2020 rules that oblige the seller to buy insurance. They differ in transport mode, delivery point and level of cover, as the table below shows, based on the ICC text.
Criterion | CIP | CIF |
Transport mode | Any, including multimodal | Sea and inland waterway only |
Where risk passes | On delivery to the first carrier | With the goods on board the vessel at the port of shipment |
Minimum cover | Institute Cargo Clauses (A) | Institute Cargo Clauses (C) |
Typical use | Air cargo, containers, cross-border road freight | Bulk and commodities, port to port |
In practice, CIF remains strong in commodity trading, where the market accepts minimum cover. For manufactured goods with a higher value per kilo, CIP protects the buyer better. The CIF details, with vessel and ocean bill of lading examples, are in the guide to the CIF Incoterm in Brazil.
Who pays for what under CIP?
The seller covers costs up to the destination, but not all of them. The standard split looks like this:
- Seller: packaging, transport to the delivery point, export clearance, main carriage to destination, Clause A insurance and transport security requirements.
- Buyer: import clearance, duties and taxes at destination, transit formalities in intermediate countries and any transport after the named destination.
- Depends on the contract of carriage: unloading at destination. If the seller's freight contract includes unloading, the seller pays; if not, the buyer does.
A frequent mistake is to name only the destination city. Define the delivery point at origin as well (terminal, warehouse, airport). Without it, the seller picks the place that suits it best. And the buyer may take on risk much earlier than expected, sometimes while the goods are still in the supplier's warehouse.
Can you import into Brazil on CIP terms?
You can, with a catch that surprises many foreign suppliers: Brazil does not allow transport insurance placed abroad for CIF, CIP or onward carriage inside the country. Insurance of goods owned by companies in Brazil, or carried within its territory, is compulsory. This comes from the ICC report on national regulatory barriers to Incoterms 2020, updated in January 2025.
In practice, a Brazilian importer rarely benefits from the policy a foreign supplier would pay for under CIP. The cleaner route is usually to agree CPT, where the seller pays carriage without insurance, and to buy the policy from an insurer authorised in Brazil. The comparison between the two rules is in the guide to the CPT Incoterm in Brazil.
When should a Brazilian exporter agree to sell on CIP?
When the customer asks for it and payment depends on it. Easy to say, harder to price. Letters of credit often list the insurance policy among the required documents, and CIP already builds in that obligation. It also makes sense when you know how to price insurance and can fold the cost into your price with a margin.
Before you sign, follow this order:
- Get a Clause A quote for the whole route, up to the named destination.
- Add carriage, insurance and export costs to the price of the goods.
- Check the destination country's insurance rules in the ICC report.
- Write the delivery point, the destination and the version into the contract: "Incoterms 2020".
Step three saves rework. According to the same ICC report, Argentina accepts foreign insurance under CIF and CIP up to the point of entry, but not for onward carriage inside the country. Other countries, such as Bolivia and Algeria, do not accept foreign insurance on any leg.
Frequently asked questions about the CIP Incoterm
No. Import clearance, duties and taxes belong to the buyer under every C rule. If you want the seller responsible for import, you need a different rule, and DDP has limitations for imports into Brazil.
The buyer, because the CIP policy is issued in the buyer's favour or in favour of another party with an insurable interest. The seller must hand over the policy or certificate together with the shipping documents.
Yes, as long as the version is written into the contract. In that case the 2010 minimum of Clause C applies. Leaving the version out invites disputes; for the status of the rules, see the article on the next Incoterms revision.
Yes. The rule allows a different agreement, provided buyer and seller record the chosen cover in the sales contract.
Sources
How do you ship on CIP terms with the right insurance from day one?
If your CIP sale travels by air from Brazil, delivery to the carrier happens early and risk changes hands while the goods are still in the country. An express partner that handles pickup, export clearance and tracking from start to finish shortens the window in which the cargo has no clear owner.
To quote your company's international shipments and keep export paperwork in one place, open a DHL Express business account.
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