I used to use a bicycle speedometer on my V-Strom since their speedometer was pretty far off. It worked fine, though it was a little slow; the sampling rate for the computer wasn't designed for higher speed., so there was always a little delay before the computer would register the speed. I suspect, though, that if this is actually an insurance requirement, anything jerry-rigged isn't going to satisfy the requirement.
I think before I started spending money on aftermarket accessories, different instrument pods, etc, I'd be calling an insurance agent in the US and start asking them the "how and why" questions.
There is this, though:
The SpeedoHealer v4 (SH) is the best speedometer and odometer calibrator on the market. Available with bike specific and universal harness kits.
www.healtech-electronics.com
Guys on the V-Strom forum used to buy them to correct the really incorrect speedometer. It also converts KPH to MPH.