From my understanding you can only be prosecuted if you have broken the LAW, and it states thats in the event of a accident you may be prosecuted for not meeting the regulations, which includes use of a radar reflector if at all prossible.
As far as insurance goes does it state if you car insurance you cant drink & drive ?.
Anyway if the regulations say or not I belive that ALL boats should do everything to make themselves as visible as possible.
Yopu only really find out if you have been seen of not when you get run down by a big ship. Then its to late
I use the Echomax EM230, a bright orange one just incase they miss it on radar