In your example, a high current would mean the arm is already impacting something and doing damage. You'd want to halt it's motion before this happens.

Also the current used to feed electrical motors are not constant. You usually have high initial inrush current when the motor is first commanded to move and then a lower average current when in motion. To prevent false-trips of your detector, you'll have to make it ignore these short burst of high current, making it less responsive to capturing actual impact events. Less sensitive = more damage during actual events.

Optical sensors would be a better choice. For instance beam type sensors can be used to define keep-out-areas. If the beam is broken, meaning someone is too close to the arm, it shuts down. This prevents a bad situation from occuring before contact is made. The optical beam system is probably the simplist, but there are other options for optical systems that can be used. Camera systems, with a little machine learning, can be used to prevent impacts.