Hi Scorps,
If the item is covered by an Autiva Shipping Insurance policy, then, when you print your shipping labels through Paypal, simply don't purchase their insurance.
Our insurance provider, U-Pic, actually prefers that the package not have a statement that it is insured because, according to them, that increases the likelihood of it being tampered with.
If you have Auctiva Shipping Insurance and Auctiva checkout enabled, which are default settings on your account, an insurance policy should be automatically generated when your customer opts to purchase it. To verify there is an active insurance policy covering this item you can click "View Transactions" at Auctiva -> My Account(tab) -> Auctiva Shipping Insurance Settings. If the item # is listed there, than it is covered by an Auctiva Shipping Insurance policy.
If you would like to purchase an Auctiva Shipping Insurance policy manually, you can do so by using the "Purchase Insurance" link next to the item at Auctiva -> Sales(tab) -> Transactions.
-Mike