Did the insurance requirement under CIP change in Incoterms 2020?

Yes — this was one of the more consequential changes in the 2020 revision. The minimum required cover rose from Institute Cargo Clauses (C), a minimal-cover standard under the 2010 rules, to Clauses (A), an all-risks standard.

Who pays for the insurance under CIP?

The seller arranges and pays for it, as part of their obligations under the term — the buyer doesn't need to source their own policy.

Is CIP always the better choice over CPT?

Not automatically — it depends on cargo value and the buyer's risk tolerance. CIP costs more (the insurance premium is built into the seller's price), but removes the uninsured-transit gap CPT leaves the buyer carrying.

Air Freight Fundamentals

CIP (Carriage and Insurance Paid To) Explained

CPT plus a real insurance obligation — Incoterms 2020 raised CIP's required coverage to the highest standard level, Institute Cargo Clauses A.

Get a Rate

ICC (A)

Minimum insurance level required — Incoterms 2020

First carrier

Where risk transfers, same as CPT

Seller

Arranges and pays for the insurance

110%

Typical minimum insured value under ICC rules

Same risk-transfer point as CPT, but insured

CIP (Carriage and Insurance Paid To) works exactly like CPT for cost and risk transfer — the seller pays for carriage to a named destination, but risk transfers to the buyer earlier, at handover to the first carrier. The difference is the insurance obligation: under CIP, the seller must also arrange and pay for cargo insurance covering the buyer's risk during that transit, at a minimum specified level.

Incoterms 2020 changed that minimum level materially from the prior 2010 edition: CIP now requires Institute Cargo Clauses (A) — the broadest, all-risks standard level — rather than the minimal Clauses (C) cover the 2010 rules defaulted to. This was a deliberate ICC change specifically to make CIP a genuinely protective term for the buyer, not just a paperwork requirement to insure at some unspecified minimal level.

When to use it: CIP suits a buyer who wants meaningful insurance protection during a transit they're bearing risk for, without having to arrange that insurance themselves. It's the natural upgrade from CPT whenever cargo value or fragility makes buyer-side risk during transit a real concern rather than a formality.

Incoterms 2020 Change

CIP's required insurance level rose from minimal cover (Clauses C) to all-risks cover (Clauses A) in the 2020 revision

This was a deliberate, substantive change by the ICC — not a rewording. A CIP shipment quoted under the old 2010-edition assumption of minimal cover is now under-insured relative to what Incoterms 2020 actually requires.

Compare against CPT, which has no insurance requirement at all →

Source: ICC Incoterms 2020 rules — CIP A5 insurance obligation, minimum Institute Cargo Clauses (A) or similar cover, a change from Incoterms 2010's Clauses (C) minimum.

Worked example

CIP Toronto — insured from the first carrier onward

The same corridor again — Kuala Lumpur to Toronto on Emirates SkyCargo's KUL–DXB–YYZ routing — this time under CIP Toronto.

As with CPT, risk transfers to the buyer at handover to Emirates (or UAL, as the seller's nominated carrier) at KUL, not at arrival. But under CIP, the seller has also arranged Institute Cargo Clauses (A) cover for the shipment's value before it's tendered — so if the cargo is damaged anywhere across the KUL–DXB–YYZ routing, the buyer, who's carrying the risk, has an actual insurance policy to claim against rather than an uninsured gap.

This is the exact scenario where CIP earns its cost over CPT: on a high-value or fragile shipment, the buyer bearing transit risk without insurance (the CPT default) is a real exposure. CIP closes that gap without the buyer having to source and arrange the policy themselves.

What UAL handles for you

On a CIP booking, we confirm the seller's insurance is actually in place at the required Institute Cargo Clauses (A) level before the shipment moves — not assumed to exist because the term says "insurance paid to."

Insurance coverage verified before booking

IATA Accredited Cargo Agent

ASEAN-Canada Specialist

Frequently asked questions

Cost and risk transfer identically under both — the difference is that CIP additionally requires the seller to insure the shipment, at a minimum of Institute Cargo Clauses (A) under Incoterms 2020. CPT has no insurance requirement at all.

GET A RATE ·Air Freight from ASEAN to Canada ·CONTACT UAL ·IATA Accredited Neutral Agent ·GET A RATE ·Air Freight from ASEAN to Canada ·CONTACT UAL ·IATA Accredited Neutral Agent ·

CPT (Carriage Paid To)

DAP (Delivered at Place)

Incoterms for Air Freight

Incoterms 2020 rules, CIP obligations and insurance requirement (A5, Institute Cargo Clauses A): International Chamber of Commerce (ICC), Incoterms 2020. Last verified: August 2026.