This could be good. It gives IGG an incentive to check project legitimacy. I hope the insurance is underwritten with an actual insurer (I'm guessing it's not legal to sell insurance if it is not. Otherwise, a particularly big project could cost IGG a lot, possibly enough to put them in the red...)
Perhaps before releasing funds it would be possible to check if the claims the project makers had made were correct. For example if they actually have a prototype, if those are their real names, etc.