NFPA 70E is titled "Electrical Safety in the Workplace." It is one of the primary references in this subject. OSHA uses it as a "goal post."
This code builds upon what has been well known since the mid-70's: that some work clothes ... primarily cheap company provided uniforms with a high poly content .... pose a real risk of making any heat / flash / fire injury much, much worse.
Now, along with this is the principle that the best PPE is the PPE that you have with you ... and not back at the shop, down on the truck, wherever. Add to this the idea that accidents are seldom anticipated ... they seem to occur when you least expect them ... and the practice of incorporating PPE into your ordinary clothing makes sense.
Do I live in a 'moon suit?' No- but seeing to it that my ordinary clothing at least has a high content of less dangerous fibers seems a reasonable precaution.
Let's face reality; there's not an electrician out there who does not deal with open panels, boxes with live wires, etc. While this may not be "hot work," we all have a very good idea as to the fireworks metal chips, dropped screws, and a slip of the screwdriver might cause.
Don't you think it is reasonable to try to limit the damage that might result? Say, by having cotton shirts?
As a side note, I have had many goals in my career ... but "maxing out my insurance premiuns" has never been one of them! Indeed, since one of the main functions of management is to reduce overhaed expenses, such a situation ought to be a 'wake up call.'
Safety is, first and foremost, a management issue. Tools, equipment, training, procedures will only get you so far; what really makes a difference is the "company culture." Simply put, management has to care, employees have to feel in control, everyone needs to be on the same team. Nothing good can come from a "Lord and Serf" or "Us vs Them" attitude.