A cutting tool includes a cutting insert comprising a top surface, a bottom surface, a clamping surface for abutting a clamp, a cutting edge, a hole extending through the insert from the bottom surface to the clamping surface, and a channel extending from the clamping surface to proximate the cutting edge, and a tool holder comprising a tool holder body having a pocket for receiving the insert, a clamp for contacting the clamping surface and clamping the insert in the pocket, and a tool holder passage in the body in flow communication with the hole in the insert. A cutting insert is also provided.