Even if you've got extra insurance cover there's no need to take extra risks. Here are a couple of common-sense precautions you can take that will ensure that both you and your camera return home together and in one piece.
Don't make it too easy
Most thieves are opportunists, and are always on the lookout for easy prey. If they see you snapping away with an expensive-looking digital compact, and then drop it into an open beach bag or into the pocket of your shorts, you're practically inviting them to try and snatch it. Keep your camera in a safer place such as a zipped or buckled pocket, or better yet in a camera pouch, on your belt and under your shirt. If you have a kit bag keep it zipped shut and don't let it out of your sight for a second. Since you're all intelligent people I probably don't need to say this, but if you go for a dip in the sea, don't leave your belongings unattended on the beach.
If the worst happens and someone tries to mug you, threatening violence if you don't hand over your camera, give it to them. Your camera can be replaced, your life cannot.
Eggs, baskets etc.
Although your camera can be replaced, the photos you've taken with it may be irreplaceable. I've always considered it a good idea to use several medium-sized memory cards rather than one big one. A one-gigabyte card can hold over 200 snaps from a high-powered compact, and only costs about £10 even for a good brand. You only really need that £80 16GB SDHC card if you plan on shooting a lot of video clips.
By taking several smaller cards and swapping them out when they are full, and then remembering to leave the full ones in your hotel room when you go out, you minimise the risk that losing your camera will also mean losing all your holiday memories.
Don't drop it
I know at least three people who have lost digital cameras by dropping them in the sea, either from the shore or from boats. All cameras come with a wrist strap or neck strap; fit yours and use it.