That’s similar to fleet insurance in the US. Insurers sometimes spot check the fleet drivers for driving while intoxicated charges, but rarely attempt to pull records on more than a handful of drivers.
In the US insurance companies are not required to defend civil cases. But if they do not defend, they will have to pay out up to your insurance limits If the limit is $50,000 and the insurance company thinks it is less trouble to pay the $50,000 than to fight the suit they will pay out. Now if your limit is $1,000,000 Then the insurance company may fight the suit.
Duty to defend is a standard provision in auto liability insurance policies in the US. How that gets enforced is statutory, meaning in some states you can attempt to tender your policy limits, but in many states (certainly California) you still have to defend until exhaustion or settlement.
Most US insurance policies include a contractual responsibility to defend against covered civil suits. If they fail to defend, they can be hit with very expensive penalties. I was once the actuary on an account where our client was obviously in the right, and was being sued by a much larger company that didn’t want them in the market. Our policy limits were $1M. We paid well over $18M in defense fees.
They assume the insured business will not employ people with a poor history.
In Wisconsin, one of our business units had to withdraw the restriction on insuring companies that hired people with dwi because it cut out too much business. 
It’s always risk / reward, isn’t it? 