It has nothing to do with fraud. Even if every business is completely and scrupulously honest this kind of insurance policy is completely unworkable because it

It has nothing to do with fraud. Even if every business is completely and scrupulously honest this kind of insurance policy is completely unworkable because it's not an insurable risk, it's just a cost of doing business. It's like trying to buy insurance to cover your monthly cost of airline travel. Like it's not a thing, that doesn't make sense.