This isn't something that is specific to music If your actions cause injury to someone to whom you owe a 'duty of care', you could be liable if those actions were negligent. Google "law of tort". If you are encouraging people to dance wildly, or if one of your speakers falls over onto someone, or someone trips over your cables, you probably owe them a duty of care. If a morris stick breaks and hits someone in the audience, you probably owe them a duty of care.

This isn't 'health and safety gone mad'. If a morris stick were take your eye out, or if you were left unable to work because of a back injury caused by an over-exuberant basket during a Cumberland Square Eight, how would you feel?

Insurance is the solution, not the problem. It is not expensive for those who perform regularly, although it can be for a one-off gig

Events and venues must have their own insurance, and for their own protection will often check that anyone working there also has insurance. This doesn't just apply to bands and musicians but to others eg electricians, vendors etc.