A very good friend who ws pretty high up in Prudential Insurance told me its good to have but not really necessary. I have a million Dollar coverage extra on my homeowners which would cover me in any instance and its not that expensive since its part of the package.
Now the other thing he told me is no matter what, if somethng happens on the establishments property , they are ultimatly respnsible. They may of course try to push it off on you and have the insurance companies fight it out but its still on them.
As far as places requiring it, again they're trying to get you to assume responsibility, or its a way to use only their entertainers who kick back $$$ to them. Used to be a big ploy in the NJ Wedding factories. A Bride hires you privately and then is told she must use one of the "House Bands" because they are covered. Just more music business BS.