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.
Englishall
I am afraid we as pilots like other humans do mess up as you put it. Some more than others hence why insurance is there.
Messing up is not just the wings falling off your plane but off the pilot too.
This should be an area that is legislated on and not in the goodwill hands of an insurance company otherwise the insurance especially regards large claims is pretty pointless.
Pace