Delivery confirmations is a good idea, which I usually forget. I'm a little underwhelmed about insurance, I had a package get mangled to a buyer, it was insured but the process to actually collect on the insurance is so slow and such a hassle, I ended up working it out with the buyer, replacing it myself, and taking a hit.
To collect they wanted photographs of the damage and statements for both me and the buyer, then the refund was to take I think 8~10 weeks.
Personally, I would offer the buyer a 50% refund. Unless he insisted on insurance, your both took a loss, it's not fair to eith