What do you think about the idea of cloud insurance? Would anyone seriously consider investing in that to offset losses from outages?

I would not personally buy it as the world is moving to a multi-cloud environment and cloud outages should be part of your overall DR strategy and be mitigated or their risk minimized. 

Given the state of the public cloud, I think your money would be much better spent on a more robust architecture. No insurance payout will ever cover the loss that you'll incur if you haven't designed a proper architecture.

I’d need a lot more information on the fine print. I would bet the fine print makes it really difficult to get a claim payout. This is likely to SLA penalties and I don’t like those penalties either

It’s much better to offer a bonus to your vendors if they exceed metrics and contract stipulations. I find it easier to pay a bonus than collect on a penalty and the insurance is probably similar