ZeroHedge article with their typical bait title.
Some of the comments expand further on why this happened (no surprise, the insurance company being a POS to their paying customer):
Geico let the lawsuit go on through judgment without defending its insured as required by the contract for which the insured paid premiums. Poor guy had a multi-million dollar judgment entered against him. Another judge later found that Geico should have defended its insured. Geico said, okay, let's start over then and retry the original case. Court said no, you should have defended your insured from the get-go.
That's why it is Geico's fault. If you're ever sued for something stupid and your insurance company that you've been paying for years to defend you from such lawsuits tells you to pound sand due to some technicality, you would get it.
That's actually quite the wake up call for me. I may have similar "protection" through Geico. I know when I started driving my mother mentioned something about them covering "if I got sued for something I said on Twitter" when she was setting me up with car insurance. I obviously don't use Twitter but I wonder if I'm spending money on something they won't honor if I ever do need it.
This is probably an outlier and simply "the cost of doing business" for them, like any mega-corporation accepting a single massive fine while making truckloads more from their illicit acts.