I heard they are selling pesach hotel insurance in case it gets cancelled
There are definitely travel insurance programs that might cover these types of cancellations. However, IMHO, a full refund of what was paid (which is probably the maximum which would be covered, and if "tour operator" offers a full refund, then the insurance would probably pay nil) does not make purchasers of this "tour" whole, as the proximity to the start date puts them in a situation where they have to find an alternative at possibly much higher cost.
I don't think the organizers of this program should be let off the hook, though it might unfortunately bankrupt them (unless they obtained proper insurance/financial backing, which I have a hunch they might have not, due to the unprofessional way this seems to be unfolding). This might serve as a lesson for the industry, and for those that participate in such programs, to make sure that there are proper financial assurances for scenarios when things go bad.