That's not any different than having the deflector below the saucer - if it were to blow up or it emits radiation (which hasn't ever really been stated before), then the bottom of the hull is blasted/irradiated just as thoroughly as the top would be.
If you ask me, I'd prefer having the thing over the bridge to keep all those pesky rocks and torpedoes from getting through...
Actually, the navigational deflector
does emit radiation - it is this projection of radiation which deflects particles (thus preventing them from striking the hull).
Typically, the lower decks of the primary hull would not contain crew quarters, but rather cargo holds, laboratories, and sensor arrays. Crew quarters generally would be located on the upper decks. Thus, long term exposure would be minimized. Granted, the location of crew quarters might not make a difference in the event of a catastrophic failure, but there would still be the issue of prolonged and/or accidental exposure given the location of the deflector on the
Kelvin. Of particular concern would be the exposure of the bridge to such radiation. Also, the navigational deflector is not capable of deflecting torpedo strikes - that would be the job of the force-fields (shields).
Incidentally - and this is totally out of left field, so don't take it too seriously - why the "
Kelvin"? I imagine with a name like that, it would be a science vessel. If it was, and if we were to follow the characteristics of previous strarship design, I imagine the science suite would be contained in a hull all its own, with navigational sensor (and engines) as far away from the suite as possible.