What does CIP (Carriage and Insurance Paid To) entail for the seller?

CIP, or Carriage and Insurance Paid To, places specific responsibilities on the seller in the context of international trade. The correct answer indicates that the seller must arrange for both transportation of the goods and insurance coverage up to the specified destination.

This means that the seller is obliged to cover the costs associated with shipping the goods to the agreed-upon location and to also secure insurance to protect against risks during transit until the goods reach that point. This provision provides assurance to the buyer that they are covered should any loss or damage occur before the goods arrive at their designated place.

In contrast to the other options, the first option is incorrect because CIP does not require the seller to deliver goods directly to the buyer’s premises but rather to a specified location. The third option is incorrect since CIP explicitly requires the seller to bear the insurance costs until the goods arrive at the mentioned destination. Lastly, the fourth option is not applicable as CIP encompasses broader obligations than just managing customs clearances; it specifically relates to both transportation and insurance.