Interesting views here, The vicarious libility thing has been around for twenty years or so as far as I can remember. I retired from Law Enforcement 11 years ago and as a supervisor the state mandated training stressing how to protect yourself and the agency. If there is a question put the issue in writing (if serious and beyond your control) to your supervisor or someone above you. It becomes his problem at that point.
BeePee is right, don't overburden with rules that can't be enforced. Keep it simple and to the point. What we do flying is mostly common sense with the exception of a few who are wreckless and don't get it! Those are the ones who cause the majority of the problems in many cases and should be delt with.
As I recall the AMA obtained insurance for just this situation several years ago.....