I understand your anxiety, Summer78, I really do. Like most grans here, I had much more freedom in my childhood than is usually considered safe today. I would go off all day with friends at age 7, wandering around country lanes, walking through fields full of cows to pick flowers, stopping to catch tiddlers in streams and take them home in jam jars.
It is different nowadays, I know, but I think a lot of it is down to perception - as Grandma 2213 says, statistically tragic incidents are very rare and the vast majority of children who get lost are thankfully found again very quickly. Both my DC have been lost briefly, my DS on a very crowded beach aged 4 (you can imagine my terror, with the added danger of drowning), and my DD at a similar age at the Lord Mayor's parade, again very crowded. On each occasion they were returned to me by a kindly mother who helped them look for me.
As others have said, I would have a full and frank conversation with your in-laws before making any decisions that will cause upset to them and to your DC. I am sure they are sensible people who will have been very unsettled by this incident and will be so much more careful with the little ones in future.