Limited liability is crucial to your pension savings. Without that, you would either have to have all your savings in assets that cannot lose value, or you would risk having all of your savings wiped out by losses in any single asset. Considering that, do you still think it's a terrible idea?
Yes. You can get your investments insured, so that the risk is priced in. With limited liability, it is a viable strategy to invest in things that have a likelihood of a mild reward, but a risk of catastrophic failure that hurts and damages a large number of people(the proverbial pennies in front of a steamroller). And it is society that bears the costs for such failures. However, insurance for such a project would be very expensive or impossible to get.
Also, with pension funds, you generally don't have the power to vote. In the case of an uninsured pension-like fund, I prefer it that the fund manager/whoever holds the voting power be the one that is primarily held accountable. If institution managing the fund is wiped out and the liability still remains, then we can move on to the the shareholders without voting rights.
You're suggesting that insurers would provide limited liability without having having a stop-loss mechanism themselves.
My guess is that insurers would look for ways to make their risk assessable and stop the potential losses by insuring you only against assessable risks. They'd insure you against a list of types of events, and nuclear war, force majeure, Nick Leeson and Knight Capital wouldn't be on the list.
Society does provide limited liability, without having a stop loss mechanism. You are defending a system where the cost of catastrophe falls on everybody but the ones who encouraged the dangerous behaviour in the first place.
