A few years ago when I was still a lawyer, I looked into this casually as a follow-up to a discussion my association had about not continuing to officiate after the game ended on a runs-ahead rule. I tracked down the actual policy, which said something like it covered all umpiring activity, with no express exclusion for any "not-a-real-game" umpiring. My opinion thus was that the policy did cover any umpiring activity, even "not-a-real-game" umpiring. Also, I believe courts construe ambiguous language, especially in insurance policies, against the drafter (i.e., the insurance company), strengthening my opinion. But don't quote me.
I also knew that my state supreme court had some years earlier spelled out a strong assumption-of-the-risk rule for participants in any sports activity, so I felt doubly protected from liability. (If I recall correctly, the case was a gung-ho jerk in a Super Bowl party halftime touch football game caused grievous bodily injury to a non-athletic woman; held: he was not liable because she assumed the risk of all injury by participating in the game). Your state's mileage may differ. In fact, I believe that at least in my state, umpire insurance premiums are essentially donations to the insurance company, except for paying for a defense lawyer and for a satisfying superfluous sense of security. Of course, I'm a cynic.
Disclaimer: Insurance coverage was never my specialty, I relied only on superficial research and law school knowledge, and I am no longer a lawyer. But I still believe my opinion is correct. I would like to hear of any final trial verdicts (not settlements) holding umpires liable for any umpiring activity. Preferably with citations to an official source, and not to friends of cousins.
But it is a foolproof way of declining to continue to umpire games that are going to come unglued because the participants no longer consider them for real.