Depending on circumstances, this may be cost effective if one is over the luggage allowances and there are several sectors. There is one particular scenario to consider: you are going on a cruise, flying to the embarkation port one day ahead of departure. If your luggage misses the flight, it may well miss the boat too - and if the cruise has various clothing expectations (e.g. formal dress) this could be a real nuisance. First Luggage (and the various other operators) can give a trackable service that makes it more likely your bags will be there ahead of you. It's pretty joyful zooming to port with no luggage.

I notice in the T&C of this company that they try to limit their liability to $2 per kilogram, so I suspect that the OP's comeback is not going to be much more than £30. There is a distinction between insurance for loss and liability for breach of contract, so if your home insurance includes legal indemnity it may be worth a chat with their in-house lawyer.