Is it inset or insert depends on context, grammar, and whether used as noun or verb, as both are correct words but used differently. Inset as noun pronounced IN-set means small picture or map set inside larger one, or fireplace set into wall recessed, common in UK as inset gas fire meaning fireplace set into wall. Insert as noun pronounced IN-sert means object that is inserted, such as fireplace insert that is heating unit inserted into existing masonry fireplace opening, shoe insert, or magazine insert. As verbs, inset pronounced in-SET means to set something into something, insert pronounced in-SERT means to put something in. So fireplace context, you would say inset fireplace in UK meaning recessed fireplace, and fireplace insert meaning unit inserted into existing fireplace. For picture, you would say inset picture or insert picture both understood but inset more common for map inside map. So both inset and insert are correct, choice depends on whether you mean recessed into wall inset or object inserted insert.
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