Some links to references:
Royal Mail/RMSD: viewtopic.php?f=1&t=187047&st=0&sk=t&sd=a#p1891183
Parcelforce: viewtopic.php?f=1&t=187047&st=0&sk=t&sd=a&start=15 #p1891504
Useful link about Parcelpro: viewtopic.php?f=1&t=152217
Read this thread for other information about separate third party insurers.
Parcelpro: http://www.parcelpro.com/
MBE: http://www.mbe.co.uk/
Transit2Insure: http://www.transit2insure.com/
For the avoidance of doubt, I have no association with Parcelpro, MBE or Transit2Insure. I'm sure there are other third party insurers but these are the only ones I know of.
**edit 17/12/2011**
Added link to Transit2Insure and corrected text.
**edit 18/12/2011**
Updated text.
**edit 22/02/2012**
Corrected typo.