If we take Quadriga's word on this then I'll bet the insurance would not pay out had they been insured. They would not insure an arrangement that depended on one asshole rummaging through his shoebox to get his paper wallets. They would treat that as incompetence and tell them to whistle for it.

Insurance is not a magic bullet. To get the payout you're going to have to satisfy their conditions. Bitpay lost a million dollars when an employee clicked on an email link. Bitpay attempted to claim. They were told it was down to their human error so no dice.

I wouldn't feel completely reassured by anywhere claiming to be insured. No crypto policy has been put to the proper test.