What if I'm being sued?

Quite frankly, this makes little sense. If there was liability insurance on the car, it will generally cover the owner and any authorized licensed driver against claims of negligence by 3rd parties.

If the driver engaged in intentional misconduct, to cause harm, as the policy excludes intentional misconduct, that would be a different story.

BUT see a lawyer as the insurance company can't just refuse to defend you without risking major liability. Further, if you'll likely be sued, you need some advice at least as to the alternatives open, including how to defend yourself, what to do or not to do, and whether or not it may make sense to file bankruptcy.