I see that a lot of sellers in the marketplace here on POTN ask buyers to cover shipping insurance. This makes no sense to me because it is typically the seller's responsibility to get the product to the buyer. To me, a sale isn't completed until the item is delivered in advertised condition and the buyer accepts this.
Let's say buyer pays via Paypal (not gift option!) and seller ships the item uninsured. For some reason, the item is never delivered. Buyer can file a Paypal claim and get their money refunded, so buyer is taken care of. Seller is the one responsible for filing a lost package claim with the courier. If the courier cannot locate the item and seller did not insure the package, he/she is pretty much SOL (loses item AND cash from sale).
It's always been my belief that shipping insurance is more so to protect the seller/shipper, not the buyer. Of course all of this is moot if the buyer pays with Paypal gift...so chalk it up as another reason not to use Paypal gift!