The past two years I’ve been using a local packaging and shipping service that caters to both residential and commercial, nationally and internationally. What I’ve learned from our conversations is that it doesn’t matter if it’s UPS or FedEx - both will attempt to deny an insurance claim, and claims are denied all the time.
For example, if sending a used component with original packaging and box, and the component becomes damaged during shipment: you didn’t provide adequate packaging as the original yet used cardboard box is considered to have “lost integrity” after initial shipment. The suggestion is to double box with peanuts between the cardboard boxes while ensuring that the component has no breathing room in the original box which would allow it to move around. The packaging should be tight and the outer box should be new per my local packaging service.
In a nutshell: package as if you’re expecting either FedEx or UPS is going scrutinize and put your packaging under a microscope to justify denial of an insurance claim.
From personal experience of working in a UPS hub in college, it doesn’t matter if there’s a “handle with care” or “fragile” on the outside of a box. If you’re under a time crunch, which is almost always the case, those labels will often be overlooked or not seen. Loading trailers in a hub is one of the harder jobs in those companies.