Add a blank image (whose color you can set) in the track below the insert picture, then CROP that image...
To begin, click the ADD BLANK icon on the menu bar.
Click the yellow star at the bottom left of the border's thumbnail, in the timeline.
Click ADD EFFECT, Choose CROP. In the preview window, drag the image edges to form a border.
Set the tracks up this way: 1 - main video, 2 - border, 3 - insert picture
Adjust length as necessary by dragging the trailing edge of the border clip on the timeline.
