Simple Delivery automatically covers items up to £750.
If you buy your own label you need to generate the original prepaid label to be able to change the tracking number and mark as dispatched.
Afterwards if you paid for the original label you can cancel it here:
https://www.ebay.co.uk/claims/simple-delivery/refund/seller
Or if the buyer paid for it it will be refunded to them automatically in 30 days.