Barry wrote, "In actuality, I am responsible for lost packages so I protect myself accordingly. But the smart Buyer won’t buy insurance because he knows I HAVE to deliver, and thus/then I will cover the insurance'.
My understanding is that seller's legal responsibility ends when the package is in the hands of a common carrier (e.g. FedEx, UPS, USPS, etc.) . Unless specifically contracted differently, seller is not responsible for the common carrier's safe delivery of package. If buyer wants to protect himself or herself, then buyer is the one who should consider buying insurance.
As an occasional forum / Ebay seller, I always buy package tracking (and factor it into the shipping cost) -- to prove that I have shipped -- but I do not buy insurance on my own.