CIP:-

As per international commercial terms 2010, one of the large 7 terms is CIP. CIP is used for
any mode of transportation like Road, Rail, Inland water, Sea, Air or by any combination(s).

As per Inco terms, CIP means Carriage and Insurance paid to (named place of destination).
I will make you CIP term, easy to understand:

CIP terms of delivery in Exports and Imports, explained easily.

Once after goods ready for export, the seller has to arrange proper packing of goods and
transport goods to nearest customs location to complete export customs formalities at his
on cost by producing necessary documents with the exporting countrys customs
authorities. After obtaining export customs permission to ship the goods to overseas
destination, the seller delivers goods to the carrier to pick up the goods for on carriage to
final destination. The goods are loaded either in to truck, local vessel, aircraft, rail, main
vessel or any other mode of transport by road, rail, inland water, air or sea at the sellers
cost under CIP terms. It is the duty of seller to pay freight or other carriage charges up to
the destination contracted under CIP terms. Once after goods gone on board the carrier,
the obligation on risk of buyer fulfills.

However, seller needs to pay minimum insurance to cover the risk of goods up to the
destination mentioned in the contract. For example, if an exporter ships goods from
Shanghai to Mumbai under CIP terms of delivery, the sellers (exporters) liability on risk
ends once the goods gone onboard on the carrier at Shanghai. However, the seller needs to
arrange minimum insurance on goods from Shanghai to Mumbai at his on cost. Under CIP
terms, the seller nominates carrier by himself.

The above simple explanation is easy to understand that under CIP terms of delivery, the
seller completes all export customs clearance procedures and formalities at his own cost and
risk. All required documents and licensing formalities in exporting country are the
responsibility of seller under CIP terms. Under CIP terms, the proper checking, packing and
marking of each packages for export is the responsibility of exporter.
Please note, I have mentioned about sellers liability on insurance cover as minimum
insurance. This means, if the buyer wants to cover more risks against loss or damage to
the goods, he needs to arrange additional insurance cover other than contracted under CIP
terms at his own (buyers) cost.

So under CIP terms of delivery, the risk of seller ends immediately up on delivery of goods
to the carrier. If two carriers are involved during on carriage to final destination, the seller
fulfills his obligation on risks immediately up on delivering goods to the first carrier.

Once after arrival of goods at the final destination mentioned in CIP terms, the rest of all
liability to take goods at importers premises is with the buyer. Under CIP terms, the buyers
responsibility is to meet all the requirements of importing procedures and formalities with
licensing, documentation etc. Any taxes, duties or other charges under import formalities
need to be payable by the buyer.