In the states, there is a whole bunch of business law about when a customer takes delivery--just to cover issues like you mention.
Check with Canadian business laws (lawyer?) and make sure you have the proper statement for the customer "contract"... Also explain it in "English" so that folks can understand it themselves.
If you are dealing with small items--it probably is not a big issue. You should probably offer the option of insurance--and you may choose to "self insure" on the smaller items (and collect the profit--you hope) for those that don't want to assume the risk themselves.
Another aspect of the law to investigate is how a Credit Card purchase may affect your liability in Canada/cross boarder tranactions... In the US, since credit cards "make a profit" off of the transaction, they are considered to be an "extension" of your business. So, if the customer does not get any satisfaction with you--then can always get the credit card company to reverse the charges and assume the loses... Of course, the CC company will just go after you (the business) directly to get their money or the
product for the customer...
I am probably just repeating things you already know--But I hope it may be of help.
-Bill
PS: The average customer probably knows zed (zip, zero, nada) about business law--so you always run the risk of a tick-off customer even though you did everything 100% correct... Another reason to add a clear statement of responsibilities for the average web purchaser. –BB