"Would they defend a guilty policy holder through a jury trial?" -- Yes. That may very well be their legal obligation. After the trial results in a judgment, they may also be on the hook to represent the defendant in an appeal depending on the judgment. If you want a settlement, you probably need to substantially lower your expectations. I am surprised, given your stated facts, you are not facing a cross-complaint. Good luck.
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Looks like your answer depends upon policy of insurance company and upon its terms. There is no way you can influence the company in this issue.
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