Cost, Insurance, And Freight

What Does Cost, Insurance, And Freight Mean?

Cost, Insurance, and Freight (CIF) is a term used by the International Chamber of Commerce for professional trading purposes since 1936. It indicates that the seller, not the buyer, is responsible for the payment of shipping, delivery, and insurance of goods. The seller is accountable for any damage or loss while the goods are still on the ship and have not yet been unloaded.

Insuranceopedia Explains Cost, Insurance, And Freight

To illustrate Cost, Insurance, and Freight (CIF), consider this imaginary example: Coco, Inc. of Toronto, Canada, is shipping car tires to Manila, Philippines. Coco, Inc. covers the cost of loading the tires onto the ship, the shipping charges, and the insurance policy that provides coverage for the tires while they are still on the ship.

Once the tires are unloaded at a port in Manila, Coco, Inc. is no longer responsible for them. At that point, the responsibility and liability for the tires, their further transport, and subsequent insurance are transferred to the buyer.