Kinda hokey...

Shipper is using insurance to cover lost item claims and buyer is paying for it. The shipper is responsible for getting the goods to you, so they are choosing to charge insurance to cover the potential loss and subsequent reship cost.

Whoever pays for the shipping, bill of lading, is usually the one that can file a claim. Basic UCC stuff for businesses. Only way a buyer could do anything for a claim is if they paid for the shipping on their own account or the seller pays shipping and subsequently subrogates their right to any claim to buyer.