Scenario - inexperienced rider has an accident on a busy road that the club run went down and believes the organiser was negligent in not assessing their ability to ride safely.
Would you want to deal with that, or hand it over to your insurers? I went on a CTC Cycling UK Ride Leader Workshop a few years ago and a fair chunk of the day was spent discussing liability and insurance. It seems their insurers don't often need to pay out or even go to court, but spend some time each year explaining to complainants why the club wasn't negligent. So to an extent you're paying for someone to deal with it in a legal way, as much as cover any settlement. The lack of claims will be why it's so cheap, you can affiliate a club to CUK for less than £100 a year and I doubt a third of that is for insurance, that doesn't cover racing and I don't know how much that would be.
it's one of those things that you'll probably never need, like insuring your house doesn't burn down, the likelihood small but the consequences huge.