Of course, I will be interested if my lawyer friends say I have this one wrong, but one of the things that has come from EU membership is some tighter consumer protections.
A key one is "The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013" - I have mentioned it before.
The reason it came up is a friend of mine saw this on a web site when ordering an item from a UK company, as a consumer, so subject to that law.
The clear implication by saying the "insured" option means no loss to you for damage or loss in transit is the converse that if you choose uninsured then you would lose out if damage or loss in transit.
However, that is not something they actually state, it is simply implied, so maybe they are just trying to be cunning to get you to pay the extra for insurance so they don't have to.
The law, in section 43 of that consumer contracts stuff is pretty clear :-
Passing of risk
43.—(1) A sales contract is to be treated as including the following provisions as terms.
(2) The goods remain at the trader’s risk until they come into the physical possession of—
(a)the consumer, or
(b)a person identified by the consumer to take possession of the goods.
(3) Paragraph (2) does not apply if the goods are delivered to a carrier who—
(a)is commissioned by the consumer to deliver the goods, and
(b)is not a carrier the trader named as an option for the consumer.
(4) In that case the goods are at the consumer’s risk on and after delivery to the carrier.
(5) Paragraph (4) does not affect any liability of the carrier to the consumer in respect of the goods.
So, if you use a courier they offer, then the trader has all the risk until it physically arrives in your possession, basically! No need to pay extra for insured courier.
Watch out for that when ordering on-line...