Well, it makes sense to me. I can tell you that I've even come across clients that demand that their ad agencies and marketing services providers carry Errors and Omissions insurance before they'll add them to the vendor list. In may case, it's a nonstarter because it's very expensive and disproportionate to the scope of work for which they contract with freelancers.

But the idea is sound when linked to legal gun registration at a reasonable cost.

Think about it... You legally buy and register a handgun. Your house or car gets broken into and the gun is stolen, and someone is shot with it. If the gun is traced back to you, you're exposed to a lawsuit that might claim that you didn't do due diligence in securing that weapon. If you have liability insurance, your financial ass is covered.
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