The insurance fund is for automatic coverage of bankruptcies that would otherwise result in socialized loss. It can be tapped without any attacks being involved, like when liquidators are slow or there's some other unusual event. Note: only specific tokens and markets are covered by the insurance fund. Details in the stats page gives an indicator if a token is backed by insurance fund.
May 4, 2023 - The Mango Markets group insurance vault now has a 100k$ insurance fund voted in by the dao.