This paper attempts to construct a theoretical model of inclusive insurance and labor flow in underdeveloped and developed regions, and systematically explains the channels and effects of inclusive insurance on promoting common prosperity. Besides, through the establishment of provincial panel econometric model and intermediary effect model, this paper empirically investigates the impact of inclusive insurance on promoting labor flow and narrowing regional income gap. The research shows that inclusive insurance is an important driving force to promote labor flow and achieve common prosperity; Labor flow is an important mechanism for inclusive insurance to narrow the regional income gap; Inclusive insurance can narrow the regional income gap and promote common prosperity by improving the appropriate labor flow. Further analysis shows that the impact of inclusive insurance on the regional income gap is heterogeneous, and it has a more obvious effect on narrowing the income gap in the central region.