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Jber Coffee LimitedGreen Coffee · Origin Supply

Trade terms

CIF Coffee

CIF is the most complete of the three terms commonly used for green coffee and the one whose insurance component is most often over-estimated. The freight is genuinely covered. The insurance is genuinely minimal.
Last reviewed 2 min read

Quick answer

Under CIF the seller pays freight to the named destination port and contracts cargo insurance — but only at the minimum level the Incoterm requires, and risk still passes to the buyer at origin loading. Minimum cover is narrower than most buyers assume, so it is worth checking what the policy actually responds to.

What CIF adds over CFR

Exactly one thing: an obligation on the seller to contract cargo insurance for the voyage, for the benefit of the buyer, at a stated minimum level and a stated minimum sum insured — conventionally the contract value plus ten per cent.

FOB
seller paysbuyer pays
CFR
seller paysbuyer pays
CIFseller also contracts minimum cargo insurance
seller paysbuyer pays
Cost borne by seller Risk passes to buyer

Under all three terms risk passes when the goods are on board at the port of loading. CFR and CIF move the freight cost to the seller — they do not move the risk transfer point.

CIF adds seller-contracted insurance; the risk transfer point is unchanged.

Minimum cover is narrower than most buyers expect

The default level of cover required under CIF is a restricted, named-perils policy — not all-risks. It responds to major casualties such as vessel loss, stranding, fire and general average, and does not respond to a range of ordinary handling and condition losses. If your commercial exposure is broader than that, agree an upgraded level of cover in the contract.

What each party does

CIF responsibilities
SellerBuyer
Preparation, packing, inland transportYes—
Export clearanceYes—
Loading on boardYes—
Ocean freight to named portYes—
Cargo insuranceYes — minimum level unless upgradedBeneficiary of the policy
Risk from loading onwards—Yes
Import clearance and duties—Yes
Delivery to warehouse—Yes

The buyer is the beneficiary of the policy even though the seller contracts it — which is why the seller must provide the insurance document as part of the document set.

When CIF is the right basis

  1. 1First imports. One counterparty handling freight and insurance removes two things to get wrong.
  2. 2No open cargo policy. If you would otherwise be arranging per-shipment cover, seller-arranged cover is usually simpler.
  3. 3Letter of credit transactions. Banks frequently require an insurance document in the set, and CIF produces one naturally.
  4. 4Small volumes. A single container does not justify the effort of arranging separate freight and cover.

Established importers with volume generally prefer FOB, because their own freight rates and open cargo policy beat what is bundled into a CIF price.

What to specify

CIF clauses worth writing explicitly

Named destination port
Required — CIF without a named port is incomplete
Incoterms version
State the edition
Level of cover
Confirm whether minimum cover is acceptable or an upgrade is required
Sum insured
Contract value plus the agreed percentage
Currency of cover
Should match the contract currency
Claims handling
Where claims are payable and who the surveyor is
Insurance document
Policy or certificate, and when it is provided

We are not insurance advisers

The descriptions here are practical trade context, not insurance advice. Cover levels, exclusions and claims procedures depend on the policy actually written. Discuss your exposure with your broker before relying on minimum CIF cover.

CIF quotations

We can quote CIF to your destination port, with the level of cover stated. Tell us whether minimum cover is acceptable or you need it upgraded.

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Frequently asked questions

What does CIF include?
Cost, insurance and freight to the named destination port. The seller pays carriage and contracts cargo insurance for the buyer’s benefit. Import clearance, duties and onward delivery remain the buyer’s responsibility, and risk still passes at origin loading.
Is CIF insurance enough?
Often not. The default obligation is a restricted, named-perils level of cover that responds to major casualties rather than to ordinary handling and condition losses. If your exposure is broader, agree an upgraded level in the contract.
When does risk transfer under CIF?
When the goods are on board the vessel at the port of shipment — the same point as FOB and CFR. Paying for freight and insurance does not move the risk transfer point.
Should a first-time importer buy CIF?
It is usually the simplest starting point, because one counterparty handles freight and insurance. As volume grows, FOB with your own forwarder and open cargo policy generally becomes cheaper and gives more control.

Tell us the coffee you need

Lots can be specified by origin, region, process, grade, screen, moisture, defect tolerance, crop year and packaging. Send what you know and we will confirm what each origin realistically supports.

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