But that's the thing, there are risk premiums, but most of the time their not priced in way that reflects the risk "accurately" because the writers don't think

But that's the thing, there are risk premiums, but most of the time their not priced in way that reflects the risk "accurately" because the writers don't think they'll have to pay out (and as along as most insurance works by calculating payout probabilities and collecting payment as income, there will be systemic incentives to massage probabilities of the unlikeliest events, rather than say, treating it as short term loan where you can derive income from lending part of it in money markets while still covering payouts, and returning the value/rolling the coverage for the next interval). And sure, it might enable companies to survive longer if premiums were higher, but "bad" companies/projects can still come into existence because its not obvious ahead of time that if choosing at random (or even if you made an better than random guess, you cant eliminate the possibility), which particular company will be a "bad" company, or a "bad" project.