Cost, Insurance and Freight (named place of delivery)
Incoterms CIF has historically been a widely used Incoterm because, in addition to placing the goods at the port of destination in the buyer's country, the CIF value is used in most of the customs to apply tariffs and import taxes, so using this Incoterm facilitates to clear the goods for import.
In Incoterms CIF the seller delivers the goods on board of a ship in the port of shipment, but he also manages and pays the cost of freight to the port of destination. Therefore, the point where the risk of transport is transferred (port of shipment) is different from the point to which the seller bears the costs of transport (port of destination).
The costs of terminal in the port of shipment are borne by the seller. Unlike Incoterm CFR, the seller is obliged to hire insurance transport covering at least the way from the port of shipping to the port of destination. The insurance shall cover the price of the contract plus 10% (i.e., 110%). The beneficiary of this insurance and, therefore, the one that must apply to the insurer for compensation in case of disaster is the buyer.
Incoterms CIF is used only for sea transport and usually for general cargo of both consumer products and industrial products of high value. If the goods travel in containers Incoterms 2010 rules recommends the use of Incoterms CIP.