I think there is another halachic problem that he was not injured on the bor; he was injured on the sidewalk near the bor. I think bor is only chayav when you hit yourself on the actual bor.
I assume what happens is that the insurance has their own lawyers. Then, if it's an open shut case, they pay (or don't pay if its open shut pattur), and if it's questionable, they settle. Because nobody wants to be telling a jury how negligent it is to have a sidewalk crack.