CIF— Cost, Insurance and Freight(Tiền hàng, bảo hiểm và cước)

Delivery & risk transfer

As CFR: delivery and risk transfer once the goods are ON BOARD at the loading port; freight and insurance are paid by the seller through to destination. Mid-ocean loss is claimed by the buyer under the policy the seller bought.

Cost split

Seller: origin costs, export clearance, ocean freight to the destination port, insurance premium. Buyer: import clearance, duties, discharge (if not already in the freight) and the inland leg.

Insurance

The seller must only provide MINIMUM cover (Clauses C), for at least 110% of the contract value in the contract currency, from loading port to destination port. For higher-value cargo, negotiate wider cover in the contract — or the buyer tops up itself.

Watch out for

• Default Clauses C cover is narrow (only listed perils such as fire, stranding, sinking) — not enough for electronics or fragiles. Negotiate Clauses A or B where needed.
• Risk still transfers at the loading port as under CFR — the insurance substitutes for it; the seller is not 'responsible to destination'.
• Containers should move under CIP rather than CIF; CIF is for sea and inland waterway only.