The campsite will certainly take out public liability insurance in case of accidents to its visitors - they slip on a wet floor, get injured by a falling tree on site, and all that sort of thing.
But this campsite is asking also visitors to have insurance in case they do damage to the site - reverse into an EHU bollard and demolish it, let their caravan run away into the toilet block, let their children vandalise the showers, and all that sort of thing.
Two different scenarios. Two different insurances.
I take your point but surely that would be covered by business insurance as well, any business involving customers paying to be in a site, self catering , hotel etc would have insurance that covers damage to business property rather than asking guests to insure for it?