If an airline cancelled my flight, did not provide alternative arrangements, and cited some legal fine print instead... then I would be very upset. They might be legally in the right, but that wouldn't prevent me from taking my business elsewhere.
Ok, look at it this way, if they cancel your flight they can re-book you on a later flight or give you your money back. But they aren't obliged to reimburse your for the consequential losses, e.g. you missed that wedding, or stag night, Ferrari day at the track. That's what your insurance is there to cover.
Do most people actually do this? I never do.
If an airline cancelled my flight, did not provide alternative arrangements, and cited some legal fine print instead... then I would be very upset. They might be legally in the right, but that wouldn't prevent me from taking my business elsewhere.