Killer question: If the weight is over 13oz, "free shipping" will automatically be upgraded to priority (from 1st Class) - so, no additional insurance is required unless you want to insure the contents for more than $50USD worth of loss or damage.
As a general rule - if it doesn't give you the option for USPS 1st Class Shipping, it's going out Priority, anyway - so no need.
Statistically - we lose about 1% of the packages because they just don't show up, are mis-delivered, or the "disappear into the void." At this time we can't speculate on the number of broken bottles that will appear - BUT - in over 500 shipments since the transition, we've lost (1) bottle. (1) broken bottle was enough for me to engage the production team and have them tell me what they needed to ensure that the packages would have the best chance of arriving safely. The end result was, they can "roll" 15ml and 30ml bottles in the existing "bubble out packages" so that the bottle gets at least 2 layers of bubble wrap around it -- PLUS, the bubble wrap integrated into the package. In the case of your shipment (the one in the blog post) - they put the 60ml bottle in the package "the long way" because that's the only way it would fit. What I have done is ordered bubble-out packaging that's 2" wider, and 2" longer, specifically for the 60ml bottles... this will allow the team to "roll the bubble wrap" around the 60ml bottles the same way they currently do for the 15ml and 30ml bottles.
The long and the short of it is, when we roll bubble wrap around a bottle twice, and then put the bottles in a bubble wrapped package... I can hold the package over my head and drop it (and I'm 6'5" tall) - and the bottles will not break. If we pack them properly (unlike the bottle in the blog post) - there's no reason they should break unless the Olga the Postal Abuser busts a move on your vapemail - and that is the reason for insurance.
I hope that explains?