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 signifies that the payment for the shipping, delivery, and insurance of goods will be handled by the seller and not the buyer. While the goods are still on the ship and not yet unloaded, the seller is held accountable for damage or loss.
Insuranceopedia Explains Cost, Insurance, And Freight
To illustrate cost, insurance, and freight, here is an imaginary example. Coco, Inc. of Toronto, Canada is shipping car tires to Manila in the Philippines. Coco, Inc. pays to have those tires loaded onto the ship, pays for the cost of shipping the tires, and pays for the insurance policy that will provide coverage for those tires while they are still on the ship.
Once unloaded in a port in Manila, Coco, Inc. will no longer responsible for those car tires and they will transfer the responsibility and liability for the tires, their further transport, and subsequent insurance to the buyer.