There are several legitimate product insurance companies who provide extended warranties for many different types of items once the statutory manufacturers' warranties expire, for a specific fee. This includes electrical items, white goods, even cars, and these entities are in fact, and in law, insurance companies.

Despite the fact that eBay don't charge a fee for the service, they are nonetheless doing exactly the same thing with private purchases on their site, which means that they're operating as an insurance company without being specifically licensed to do so. It would be different if they were the owners of the products being covered by their money back guarantee, but they're not, and neither do they have any financial or pecuniary interest in these items.

I therefore maintain that eBay are offering a form of insurance while not being duly licensed to do so, and consequently are not exempt from the legislative requirements for companies offering insurance. On that basis, I'm of the opinion that what TB is saying is probably correct and is indeed an avenue well worth pursuing.