Features of CIP
Here are the most significant features of CIP (Carriage and Insurance Paid To):
1. Delivery Location: Under CIP, the seller takes charge of delivering the goods to a specified location, typically the buyer’s location or another mutually agreed-up location.
2. Carriage: The seller takes responsibility for arranging and paying for the primary dispatch of the goods to the designated location. This includes choosing the mode of transportation (e.g., truck, ship, a plane) along with controlling the associated costs.
3. Insurance: Furthermore, the vendor is liable for obtaining and paying for transit insurance coverage for the goods being sold. This insurance generally protects the buyer against the risk of loss or damage to the shipment during transit.
4. Risk Transfer: The buyer bears the risk of loss or damage to the goods when the seller delivers them to the first carrier (typically at the seller’s location) under CIP. The seller remains liable for risk until the goods are transferred to the carrier.
5. Associated Costs: The vendor is responsible for transport and insurance costs under CIP up to the specified destination. The buyer is responsible for all costs and hazards associated with unloading the goods at the destination, as well as any additional transportation or storage expenses incurred.
6. Insurance Coverage: The seller’s insurance coverage should be sufficient to cover the value of the goods and should be in the buyer’s name or interest. The sales contract should outline every detail of the insurance coverage.
7. Documentation: The seller must provide the buyer with the necessary proof of purchase, such as transportation papers and insurance certificates, in order for the buyer to take possession of the goods and file an insurance claim in the event of loss or damage.
8. Customs and Import Duties: Once the goods have arrived at the specified location, the customer is responsible for customs clearance, import duties, and taxes.
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