Its their legal duty to pay the 3rd party. Whether they cancel your policy and try reclaim all the costs from you is unfortunately up to them, but they need a good reason and proper evidence (Mods are 99.9999% easier to prove that you've knowing bullshitted when taking out your policy than 'fronting' for obvious reasons).
Like arr kid said above, see if there is any CCTV anywhere, it sounds like you have already admitted liability (

) but speed and manner of driving could go in your favour.
If you do any dodgy deals with the taxi man then
make sure you get it all written down with his name and address on and signed so you don't get any come backs.
Quote:
Originally Posted by mlawlan69
fuck i hate insurance, pathetic scam on humanity.
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Couldn't have summed up my thoughts on 'em any better