CIP vs DAP – who pays for what?
CIP is Carriage and Insurance Paid To and DAP is Delivered at Place. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIP, the seller also covers insurance. Under DAP, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer.
- Insurance
- CIPSellerDAPNo obligation
- Risk passes
- CIPOn handover to the carrier in the country of dispatchDAPAt the place of destination, before unloading
Full cost breakdown
| Cost | CIP | DAP |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Seller | Seller |
| Main carriage (freight) | Seller | Seller |
| Insurance | Seller | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | When the seller hands the goods over to the first carrier – even though the seller pays for transport and insurance. | At the place of destination, when the goods are ready for unloading from the arriving means of transport. |
| Mode of transport | Any mode of transport (sea, rail, air, road) | Any mode of transport (sea, rail, air, road) |
Notes
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
What to watch for when importing from China
CIP Carriage and Insurance Paid To
In Incoterms 2020, CIP requires broader insurance than CIF: Institute Cargo Clauses (A) – “all risks” – at 110% of the value of the goods. Even so, the risk passes to you in China, when the goods are handed over to the carrier. The policy protects you, but the supplier takes it out – ask for a copy before shipment.
More about CIP →DAP Delivered at Place
The supplier delivers the goods to the agreed address, but import clearance, duty and VAT are your responsibility. A “DAP Warsaw” price is therefore not the final price – add duty, VAT and the cost of customs clearance. State the exact address, because “DAP Poland” is not enough. Unloading is also your responsibility.
More about DAP →When to use CIP and when to use DAP?
- CIP – for any mode of transport, when the supplier arranges carriage and broad insurance cover (Clauses (A)), while you handle customs clearance in Poland.
- DAP – when the supplier is to deliver the goods to your address, and you want to keep customs clearance in your own hands. With a new supplier, it is a safer alternative to DDP.
Has your supplier quoted a price including transport?
Compare it with our offer for transport from China – by rail, sea or air – with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between CIP and DAP?
Under CIP, the seller also covers insurance. Under DAP, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer.
Where does risk pass to the buyer under CIP?
When the seller hands the goods over to the first carrier – even though the seller pays for transport and insurance.
Where does risk pass to the buyer under DAP?
At the place of destination, when the goods are ready for unloading from the arriving means of transport.
Can CIP and DAP be used for rail freight from China?
Yes. CIP and DAP can be used with any mode of transport: sea (including containers), rail, air and road.
Compare other pairs
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.