Requiring insurance is such a huge barrier to entry it would completely destroy the market. Only the incumbents will be able to play. Imagine you came up with the next greatest fizzbuzz app and wanted to publish it to the market. Immediately you need what, $10/mo, $100/mo, $1000/mo for insurance? Does an adjuster need to go through your app and determine your risk and thus rate? Does your rate go up overnight when your app lands on the front page of HN and you gain a ton of users?

It sounds great if I'm MegaCorp with an entire department for dealing with this stuff, but as an independent developer trying to start something it's a horrible idea.