I would consider a metal heat shield crucial, particularly with it that close to the wall...not for insurance purposes (since no insurance carrier would pay a claim on an outlaw propane-bottle "stove" anyway) but because it might prevent the place burning down. In a house, without a heat shield, you can't have a woodstove closer than 36" to the wall, IIRC. It looks like your stove is less than 12" from the wall. And since a propane bottle is so much thinner than any wood stove, it's going to radiate one hell of a lot more heat than any wood stove.
I'd also shield the stack all the way up to the ceiling with it that close to the wall. Sheet metal is cheap ... new sheds and saws, not so much. Also, you want unobstructed air space behind your heat shield to promote convection (moving air to cool the heat shield). You don't want it hard up against the wall...at least an inch hold-off to the wall or whatever is behind it. (with non-flammable spacers in-between) and space underneath to allow cool air to get under it and rise as it gets heated, cooling the heat shield. If you don't ensure convective cooling of the heat shield, it doesn't really do much except "even out" the heating of the substrate through conduction. The wall behind it will still get hot...just more evenly hot.