Cost, Insurance and Freight (Incoterm 2000 continue)

Cost, Insurance and Freight (CIF) is a common term in a sales contract that may be encountered in international trading when ocean transport is used. When a price is quoted CIF, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. CIF is identical in most particulars with CFR, and the same comments apply, including its applicability only to conventional maritime transport. In addition to the CFR responsibilities, the seller under CIF must obtain in transferable form a marine insurance policy to cover the risks of transit with insurers of repute. The policy must cover the CIF price plus 10 per cent and where possible be in the currency of the contract.

In a contract of sale, the cost of the goods, the insurance, and the freight to the destination are included in the contract price. Unless there is something in a CIF contract to indicate the contrary, the seller completes the contract when the merchandise is delivered to the shipper, the freight to the point of destination is paid, and the buyer has been forwarded the Bill of Lading, invoice, insurance policy, and receipt showing payment of freight.