I guess a lot depends on if there is another vehicle involved that is to blame or if its a single vehicle accident were they have just come off due to rider error or road conditions.

In the latter case it could quite possibly be the rider who ends up in most trouble. A court would probably rule it was illegal because their insurance wasn't correct.

I suspect their insurer would initially legally have to pay out for the 3rd party/pillion's injuries. They would then sue the rider to get their money back due to giving dishonest info when taking out the policy.