By including the word 'insult' in the act, it made it possible that you might be arrested for calling someone a policeman in the wrong tone of voice. (And yes - that definitely was the wrong tone of voice in the last sentence.)
The fight against this egregious intrusion into civil rights has been led by the organisation called Reform Section 5, with support from many others including the National Secular Society (NSS).
That the government has backed down on this case seems truly surprising. Yes - they experienced their heaviest ever loss in the House of Lords, being out-voted 3 to 1, but this rarely seems to make a difference to the barely elected coalition.
Read more about the story on the NSS newsletter. While you are there, why not consider joining the organisation.