If I understand you correctly under this scheme a person injured by fracking would have to file an insurance claim for damages. But insurance companies don't like paying claims, so then the injured party has to sue some giant battalion of highly paid insurance lawyers. The people that persist through the legal gauntlet for years would finally get a fraction of the actual damages because damages are defined very strictly in that they don't take into account a host of external factors, including things like the livability of a town for your grandkids. All of this under-payment of claims is calculated into the market's original risk calculation of the insurance policy because this is how insurance companies and the legal system have performed historically. So the end result would be that frackers get to destroy small towns for less than the actual value of the destroyed town.