letting the buyer supply the courier could leave you open to item not received claim
no it couldn't, because legally, he receives it as soon as courier collects it. This is down to what's known in the trade as incoterms. If you sell EXW (ex works) buyer takes responsibility of both risk and cost as soon as it leaves the sellers door.
Therefore legally, if it got damaged with the courier, the only way they could claim is if you didn't pack it properly. If the courier damages it or loses, and it was packed properly, it is their responsibility.
However, the way paypal works, it is a risk