As we delve into the world of international trade, it is important to understand the term Cost, Insurance and Freight (CIF). This refers to an arrangement in which the exporter is responsible for obtaining and covering the cost of insurance for the imported goods. When applying for a documentary credit, the exporter must include the insurance obligation and provide a document proving insurance coverage in order to receive payment. This serves as a safeguard for both parties involved, ensuring that the goods are protected and the transaction is completed successfully.
