Bang on the nail with the insurance issue mike, it's more about protecting the spectators and organisers than the riders themselves.
MK for example is in a public park, if Mr Brown want's to walk his dog down there in the middle of 500 riders/spectators he can! and if something were to happen to Mr Brown and he was that way inclined i could loose my house, that's all the incentive I need to renew my clubs BCF affiliation every year.