The purpose of the rules is to provide a method of identifying a winner when a rule is broken (and this may result in a collision). The International rules for the prevention of collisions at sea are there to prevent colissions.
This is why the insurance company may take into consideration what the PC say. The PC find out what they believe happened, what the results were and which rule(s) we broken, thus they provide a ruling on how the sailing rules apply.
I agree with you about the relationship of the PC with the insurance company with resect to the issue of liablity. The insurance company and the legal system will determine liability. So a court could decide that you are 60% liabile for the accident and will enforce that judgement. If you don't pay (or your insurance company won't pay) they can take further legal action through the civil courts.
The critical part that puts your pocketbook at risk (If you want to continue sailboat racing) is part C in which you agree to be responsibile for the damage solely on the basis of fault as determined by the racing rules and the PC and you expressly agree to NOT be bound by the legal system, insurance company etc.
So you agree to be responsible...and so you pay up.... not because you are legally liable... but rather because you agree to this rule. The civil court does not enforce anything here.. rather you agreed to pay up whatever your insurance company won't pay when you registered for the regatta.
For example, a windward leeward crash in which the racing rules clearly award the leeward boat right of way and that is the PC judgement. The damages for both boat are equal at 5000 for each. However, the insurance companies decide that it's a 60 to 40% split of responsibility eg the 40% of the liability is to the leeward boat who according to the racing rules is not at fault
What happens now?
Does this mean windward will pay the other guys Leeward's deductible of 500 because you windward were at fault under the racing rules and the insurance companies have sorted out how much each company will pay but you windward are 100% responsible since you lost the protest.
Does this mean that you pay the 40% of the damages out of pocket (4000) because you agreed to be responsible and leeward does not want to put the claim in on his insurance since he is 40% liable because "he was not at fault in the protest committee" and you agreed to be responsible for damages irregardless of the court/insurance liability judgment?
Hmmm?
