Limited liability provides business owners with protection against total loss of their income, thus pushes the consequences of loss of business to workers. Mandatory income insurance will still give owners the flexibility and security of limited liability, but ensures a margin of safety for those not yet paid.
This is a similar model to having mandatory superannuation, in that it reduces the strain on the current welfare system, much like how superannuation reduces the strain on the pension system.
Additional cost will make companies less competitive against international companies that do not care about workers income protection.
Workers may prefer to take the risk of no income protection.
Full: Covers unpaid wages and also provides a few more months of slowly tapering down income. Allows for workers to adapt to new financial budget. (e.g. downsizing)
Partial: Just cover unpaid wage.
Side Note: Could also make it optional if you are not a limited liability corporation, since you are taking direct risk yourself anyway.