In the Incoterm CIP, the seller delivers the goods in their own country when loading them in the first carrier hire by himself, but the seller also pays for costs of international transport to bring the goods to their destination in the buyer´s country.
The buyer assumes all the risks once the goods have been delivered to the carrier in the country of the seller. If subsequent carriers are used to bring the goods to the place of destination, the risks are transferred from seller to buyer when the goods have been delivered to the first carrier.
Under Incoterm CIP the seller must hire insurance to cover the risk borne by the buyer for loss or damage of goods during international transport. Consequently, the seller contracts for insurance and pays the premium, although the beneficiary of the insurance is the buyer. However, the buyer has to take into account that Incoterm CIP requires the seller only an insurance with minimum coverage (Clause C of the Institute Cargo Clauses). If the buyer wants a larger coverage, he needs to agree with the seller to hire additional insurance.
In this Incoterm, the seller has to complete the formalities and bear the costs of customs clearance for export, not the import clearance that corresponds to the buyer.
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