I've noticed that for the most part, NPCs involved in your quest dont rat you out. There are places where that is broken from what I've heard (like Silsalien in Auridon).
While it can be a nuisance, I've found that in these situations, a couple casts of Venom Skull (or Flaming/the other morph) is more than enough to kill NPCs without having to use anything else.
Then again, I push for high weapon damage on my front bar (2H), so your mileage may vary.
..I have had this happen on my Necro in a few places, though.