Pace - I am 99% sure there is no feasible protection for your personal assets if
you are the pilot when you prang it into the school / nursery / convent / football match [delete as appropriate].
There may be liability scenarios
not related to you being at the controls, where a Ltd Co would be effective. One possibility might be a ferry flight on which the aircraft is lost, and the client sues for the aircraft value, and for some reason (unforeseen by you) your insurer walks away from paying. In that case, if the client contract is with a Ltd Co (which you own 100%, or whatever) the most he can do is force the Ltd Co into liquidation, and provided you have properly discharged your duties as a Director (which includes having "reasonable" insurance) you are not personally liable.
I don't know how this works in airline crashes, many of which - unlike GA where 3rd party damage is virtually unheard of - cause massive mayhem on the ground. I imagine that the airline insurance policy indemnifies the pilots. I would not want to be a commercial pilot otherwise... taxi into another 747 and lose your house!
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.
Irrespective of this theoretical risk, is there any evidence of an insurer ever avoiding a payout in such a case? How would such an insurer know the actual flight conditions? This kind of concern reminds me of the "duty of care" stuff, which has caused such mayhem in all walks of life (schools not taking kids on trips, the whole yellow jacket brigade, etc) but 99% of which has never been tested.