Transportation Operations LINCS Practice Exam

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Which term refers to transportation that includes insurance for the cargo?

The correct answer is: CIP

The term that refers to transportation that includes insurance for the cargo is known as CIP, which stands for Carriage and Insurance Paid To. In this arrangement, the seller not only covers the cost of transportation, but also provides insurance for the cargo while it's in transit. This gives the buyer protection against loss or damage during the shipping process. In contrast, CIF (Cost, Insurance, and Freight) also includes insurance but is specific to maritime transport, while FAS (Free Alongside Ship) and EXW (Ex Works) do not provide coverage for cargo during transportation. FAS indicates that the seller delivers goods alongside a vessel, and the buyer assumes responsibility from that point, while EXW places all responsibility on the buyer from the seller's premises. Thus, CIP is the term that comprehensively covers both the cost of transport and the provision of insurance, making it the correct choice.