S.O.
My 2 YO DD is going through this right now. Something happened at my parents house last weekend where a fly kept buzzing around my DD. My older son went over to the fly and yelled at it to "stay away from my little sister you mean bug!". And ever since then my DD won't go near a bug and cries until I come and pick her up.
I just tell her that bugs are nice and I walk over to the bug (if I can) and show her that it's not a big deal. And sometimes my 4 yo son will go over and pick it up (rolypoly's and lizards...yuck!) and tell his sister that it's okay. I think the most important thing is to not make a big deal out of it and feed her fear. Hopefully it's just a phase.