I look at the best price and then the retailer. If it's a well known one, or one I used before, that favours that.
I get why you're doing this - to get the cheapest price. But it does look scummy to do it this way. In the industry the risk is borne by the merchant until the customer signs off, unless I arrange for my own courier pickup.
A better way would be to include the insurance in the shipping fee and offer no free shipping and offer one form of shipping or all forms of shipping are insured. I get that you have to insure the delivery, but you have to do that regardless because under the CPA and as per the overall standard the merchant is considered responsible until the item is delivered or picked up. The couriers are your agents, unless it's a situation that I send my own courier to you.
I would be willing to overlook an insurance fee, if the total was still way superior to alternatives.
If Amazon sells the item for R1000 with free shipping and you sell for R800 plus R100 for shipping and R50 for insurance, I may decide to go with you, although R50 is a small difference to risk hassles unless you have good ratings or I've used you before.
It just looks a bit iffy. Very few companies do it this way. Evetech does but they are reputed to have terrible customer support.
I did actually purchase a product from them last month but the price was significantly lower than elsewhere (now the price is back to similar as elsewhere) and so went with their 'insurance' to avoid the hassle of threatening with regulations and small claims courts. Even with the insurance the price was much, much lower than other sites.