CI (Cost and Insurance): Legacy Trade Wording and Risk Controls

CI Is Not a Current Standalone Incoterms Rule

The SSDER glossary expands CI as COST AND INSURANCE. In older contracts, house forms or bilateral quotations, the phrase may be intended to mean that a seller includes cost and insurance in a price. It does not, by itself, provide the complete delivery, risk, transport, customs or insurance allocation found in an ICC Incoterms rule.

The safe procurement response is to flag the abbreviation and ask what the parties intend. State the named place, delivery point, mode, transport contract, export and import obligations, risk event, insurance cover and document set. If the transaction is intended to use Incoterms, replace CI with the selected current rule and version.

Separate Price Components from Risk

“Cost” can mean the goods price plus freight, insurance or other charges. “Insurance” can mean a policy obtained by the seller, a certificate delivered to the buyer, or merely a statement that the price includes cover. None of these answers tells the buyer when risk transfers or who bears loss before arrival.

Build a responsibility matrix covering packing, loading, export clearance, main carriage, unloading, import clearance, duties, insurance, claims notice and evidence. Finance should see the cost basis; logistics should see the physical handoff; legal and insurance should see the risk and policy wording.

Distinguish CIF and CIP

Under the ICC Incoterms 2020 rules, CIF is designed for sea and inland waterway transport where delivery occurs on board the vessel at the port of shipment, while the seller arranges freight and insurance to the destination port. CIP can be used for any mode and has a different insurance requirement and delivery logic. The named place is essential in both cases.

Do not choose CIF merely because the quotation says “cost and insurance.” For containerised or multimodal cargo, CIP or another rule may better match the actual handoff. Have the trade specialist validate the selected rule, the transport document and the policy before the award is signed.

Control Policy, Claims and Documents

If a seller arranges insurance, specify insured party, risks, sum insured, currency, deductible, exclusions, voyage, claims procedure and the time by which the certificate or policy must be delivered. A certificate of insurance is not the same as a policy with enforceable coverage. Align the documents with the commercial invoice, packing list, bill of lading or multimodal record.

Define who notifies the insurer and carrier, who preserves packaging and survey evidence, and who pays deductibles or uninsured losses. A contract that uses CI but leaves these controls to custom is likely to produce an invoice dispute or an uninsured gap after damage.

Worked Example: CI on a Containerised Shipment

A supplier quotes “CI Istanbul” for a container shipment. The buyer assumes the supplier bears risk until arrival, while the supplier’s terms say risk passes when the container is handed to the first carrier. The insurance certificate covers only a named vessel voyage and excludes the inland leg to the plant.

The corrected contract replaces CI with a current rule that fits the movement, names the delivery place, and states the risk event and insurance level. The buyer obtains the transport document, policy wording and claims contacts before release and models import charges and inland delivery separately from the supplier’s price.

Metrics and Governance

For CI cost and insurance legacy trade wording, measure both service and evidence quality. Useful indicators include first-pass acceptance, exception rate, response time, unplanned cost, document completeness, damage or discrepancy rate, and the percentage of shipments that follow the approved process. A dashboard should distinguish a supplier failure from a carrier, terminal, broker or internal master-data failure.

Review the metric trend with procurement, logistics, finance, quality and the responsible specialist. Use a monthly exception sample to test whether the control worked in a real transaction, not just whether a field was filled. Repeated exceptions should change the sourcing strategy, contract, lane design or supplier development plan.

Keep the control proportionate to risk. High-value, regulated, time-critical or safety-sensitive cargo needs stronger evidence and faster escalation than a routine shipment. Record the decision owner, approval date, source documents and follow-up action so the next buyer can understand the operating history.

Supplier and Carrier Questions

• Which CI or related glossary condition is assumed in your quotation, procedure or service description?
• Which party owns each data field, physical handoff, inspection, document and exception?
• What evidence will be available before release, loading, movement, receipt, invoice approval or claim?
• What changes require advance notice, requalification, a revised price or a new risk decision?
• How will the supplier report incidents, delays, mismatches and corrective actions, and within what response time?

Implementation Sequence

Implement the control in a small, representative lane first. Capture the baseline process, test the required data and evidence, run a real transaction, and review every exception with the people who performed the work. Do not declare the control effective only because a supplier signed a procedure.

After the first three shipments or operating cycles, update the purchase-order clause, work instruction, scorecard and training. Scale the control to other suppliers only when the evidence is repeatable and the owner can explain what happens when the normal path fails.

Common Mistakes to Avoid

• Presenting CI as if it were a complete Incoterms 2020 rule.
• Assuming the party that pays freight also bears transport risk until destination.
• Choosing CIF for container or multimodal cargo without checking its delivery logic.
• Accepting an insurance certificate without checking policy wording, exclusions and claims rights.
• Leaving named place, unloading, import clearance and inland leg responsibilities unstated.

Procurement Implementation Checklist

• Flag CI as legacy or ambiguous and document the intended commercial meaning.
• Name delivery place, risk event, mode, transport contract and governing rule.
• Compare CIF, CIP and other current rules with the real movement and handoffs.
• Specify insurance cover, policy, deductible, claims notice and evidence duties.
• Reconcile invoice, transport document, customs, policy and delivery milestones.
• Have trade, logistics, finance, legal and insurance owners approve the wording.

Frequently Asked Questions

Related Kurums Guides

• Cargo Manifest Controls
• Billed Weight and VGM Controls
• Shipping Documents for Procurement
• Customs Documents for Procurement
• Container Types and Load Securing
• Freight Contracts and Parties

Standards and Authoritative Sources

• ICC — Incoterms 2020
• ICC — Incoterms Rules Overview
• ICC — Incoterms 2020 Wallchart and Resources
• ICC — Insurance in Incoterms Rules

Glossary terms covered: CI, Cost and Insurance, CIF, CIP, Incoterms 2020, risk transfer, insurance