Risk mitigation is about a) lowering the risk and b) lowering the cost in the event you get unlucky.

This doesn't seem to do the first one. It doesn't actually stop you from doing the things you could get in trouble for doing, even though that was ostensibly the original point.

And the second one is where you want to shave off the high side, not the low side. This is why normal insurance is typically a policy large enough to cover whatever plausible amount of damages there could be and then a deductible so you don't have tons of people filing claims for amounts small enough they could reasonably cover themselves instead of paying the insurance company a margin to do it. But this is the opposite of that, they'd cover a little claim you'd have been able to shrug off regardless but not the one where you'd most want coverage.