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@Velocio
There are two levels of insurance:
1) Club level for non-profits: http://www.britishcycling.org.uk/membership/article/memst-Insurance-For-Clubs
2) Member level for riders: http://www.britishcycling.org.uk/legalandinsurance
The club insurance will insure riders participating in club events.
If you have a British Cycling membership (anyone with a +race above), then you are additionally insured as an individual cyclist. Which includes on your commutes, etc.
In the case of the latter, the company behind it (Leigh & Day) will sue the socks off anyone who hits you. IMHO it's essential stuff, but BC membership is entirely up to you.