I find it a bit worrying that the insurance company can choose not to pay out due to the clause that FL kindly pointed out.
My worry is that one does something inadvertently which breaches the ANO and has an accident (take the VFR into IMC scenario) - low houred pilot flies into IMC, loses control, gets into a spin, crashes, killing a couple of people. Now if I read what FL wrote correctly it seems that an insurance company *could* choose not to pay out, as the pilot was flying outside the privileges of his (her) licence....In other words, make a mistake and they won't pay out because you are in breach of the ANO.
I'd like to think that in the above example an insurance co. would pay out, because if not then it potentially exposes all of our estates to massive legal bills (and bankrupting those we leave behind) should me mess up in a similar manner. We shouldn't mess up of course, but that is another discussion.