While operating on one of his employees, Dentist Robert Woo temporarily implanted fake boar tusks in her mouth and took photos of her. The boar tusks, he claimed, were merely a practical joke -- an allusion to the pot-bellied pigs her family raises. He hoped the joke would help foster a "friendly working environment."
Unfortunately, the employee wasn't amused when she later saw the photos. She sued him for outrage, battery, and invasion of privacy. Woo asked his insurance company to represent him, but they refused, saying that the joke was intentional and not a normal business activity. Therefore, Woo had to hire a lawyer on his own and eventually reached a settlement with his employee in which he paid her $250,000. Here's what happened next
Woo sued the insurers. King County Superior Court agreed with him that Fireman's had a duty to defend him. A jury awarded him $750,000, plus the $250,000 he was out, as well as lawyers' fees - well over $1 million all told. The state appeals court threw that out and Woo appealed to the high court, and now has won the full amount, plus his appellate legal bills.
I'm not normally sympathetic to insurance companies, but it sounds like they have a point. His strange practical joke doesn't seem work related.