Cost, insurance, and freight (CIF) is an expense paid by a seller to cover the costs, insurance, and freight of a buyer's order while it is in transit. The goods are exported to a port named in the sales contract. Until the goods are fully loaded onto a transport ship, the seller bears the costs of any loss or damage to the product. Further, if the product requires additional customs duties, export paperwork, or inspections or rerouting, the seller must cover these expenses. Once the freight loads, the buyer becomes responsible for all other costs. CIF is similar but not the same as carriage and insurance paid to (CIP).

Cargo insurance protects you from financial loss due to damaged or lost cargo. It pays you the amount you're insured for if a covered event happens to your freight. And these covered events are usually natural disasters, vehicle accidents, cargo abandonment, customs rejection, acts of war, and piracy. 


  • Cost, insurance, and freight (CIF) is a common method of import and export shipping.

  • CIF determines when the responsibility for goods transfers from the seller to the buyer.

  • CIF is one of the international commerce terms known as Incoterms.

Terms of Cost, Insurance, and Freight (CIF)

The contract terms of CIF define when the liability of the seller ends and the liability of the buyer begins. CIF is a conventional method of shipping goods for importers. It is similar to free-on-board shipping with the primary difference being which party is responsible for the expenses up to the point of loading the product onto the transport vessel. Usually, exporters who have direct access to ships will use CIF. Under CIF terms, the seller is responsible for specific protections for an order. The seller's responsibilities include:

  • Purchasing export licenses for the product

  • Covering the cost and contracts of moving or carrying the goods

  • Insurance to protect the value of the order

  • Providing inspections of products

  • Covering the cost of any damage or destruction to the goods

The seller must deliver the goods to the ship within the agreed-upon timeframe. They must also give the buyer sufficient notice of delivery and provide proof of delivery and loading.

The exact details of the sales contract will determine when the liability for the goods transfers from seller to buyer. In most cases, the seller's obligation ends once cargo loading is complete. However, a buyer may stipulate that the seller is responsible until the goods reach a port of import or even their final destination. 

Following the terms in the sales contract, once the goods change hands, the buyer must pay the agreed price and must, now, cover any additional transportation, inspection, and licensing costs. Other typical expenses include customs duties, taxes, and the shipment of goods to their final location.

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Diminishing Deductible


Be rewarded for safe driving! For every loss-free year, the original deductible amount will decrease by 25% until it reaches $0.


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When a tractor and trailer are insured under the same policy and damages result from the same covered loss, you’ll pay only one deductible.


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Personal Effects


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Electorinc Equipment


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Traps, Chains and Binders


The cost of replacing additional equipment can quickly add up.