This is necessary when working with live equipment. In many cases, there are chances of tools getting accidentally dropped on to live bus bars or terminals. A screw driver making contact to a live circuit can get in contact with an earthed panel. These can result in a flash over and an explosion with serious consequences. 
All insulated tools are labelled with a voltage rating. Insulated Tools should never be used as the primary method of protection. For instance, all insulated tools should be used with an Electrical Glove of appropriate rating
