Your friend is in the poo poo!!
His policy as you say allows him to drive other cars, it will also say words to the effect of,
The policy holder may also drive with the owners permission a motor car not owned by the policy holder and not hired or leased to the policy holder under a hire purchase or anuual leasing agreement.
The problem here is he DOES own the other car.
The reason they do this is so you don't buy a fiesta then use the insurance to then drive a ferrari that you also own.
It is a complete MYTH that the other car needs to be insured(on it's own policy), it does not at all, so long as legal(mot/tax etc).
If driven uninsured and there was an accident the "last man standing" rule applies with regard to any claim.
tabetha