This feature lets customers pay for and add shipping insurance to their order as a digital product. This promises the customer either a refund or replacement free of charge in the rare scenario that a carrier loses their package. The revenue from this feature more than compensates for the occasional claim and is another way to generate new revenue.
Shipping insurance is added to the customers Shopify order as a digital product. As the merchant, you will see this appended to their order and should a claim be made, take the appropriate action in line with your insurance policy.