NLIC.org

Jennie Said:

I get paid from the auto insurance to take care of my dad they sent me a 1099 i dont have a business do i have?

We Answered:

If you received a 1099 Misc for services you performed you
will need to file a Schedule C to report this income and then
a Schedule SE to report the self-employment tax of 15.3% of
your net earnings. The totals from these two schedules will be
posted to your 1040, so long as you have not incorporated
yourself.

Gary Said:

If I have a small business and need to hire delivery drivers, do I need to pay auto insurance for them?

We Answered:

You need to hire these drivers as subcontractors. You pay them by the mile or per delivery. They furnish their own gas,insurance,etc.
If you don't you are going to assume risk for their non-business driving habits, possible fraud on gas used,etc.
Spell it out up front as to what you are paying for. The only other solution is for you to purchase the vehicles you need and hire them to just drive. This gives a better image as you can letter or put graphics on the vehicles for advertisement for your business. You can keep them clean and put forth a lot of advertising for your business.
State in your hiring process that drivers must have a clean driving record for the last 2 years, and that any traffic violations will be cause for dismissal. Talk over the details with your company insurance agent.
This cost of vehicles can be depreciated off of your taxes also - talk with your accountant. You can also drive this vehicle home after work as it is considered a company vehicle.
Also tell drivers they must keep the inside of the vehicles clean and no passengers are allowed to ride in the vehicles including family and or relatives. Cars cannot be taken home.

Terry Said:

auto insurance~ two different jobs equals business use?

We Answered:

That sounds like a stretch to me. If the car is actually used to just drive there, and drive back, I can't see any possible reason for calling it business, the mileage thing is pretty lame. I would ask for clarification in the legal wordings of the policies they issue. I bet they can't provide them.
Going by their definition, a person who worked on call at WalMart, and put in shifts on the cash register at 2 stores in the same city would be using his car for business!

Edit:
Glad it was fixed, it sounds like the first person at the insurance company was a newbie, or somebody who spoke without checking the whole story.

Calvin Said:

Why do auto insurance companies ask whether you use car for business use?

We Answered:

They ask because you are on the road more (could be most of the day depending on what you do) and put more mileage on the car, therefore, there is more chance of an accident. You would drive you car much more than someone that just drives to work. There are also different rate classes for driving to work (pleasure up to 3 miles one way, 3 miles to 10 or 15 miles one way - depends on the state & over 10 or 15 miles one way) The more you drive even based on your commute, the more you will pay for insurance. The business use class is the highest because even the over 15 miles class maybe drives 40 miles in a day to work & back are only on the road twice a day. Also, if you say you do use the vehicle for business use the agent will ask what the business use entails. Are you just running errands for the business (going to the post office to pick up mail, going to the bank with the deposit)? Or are you delivering mail or newspapers or taking people in your vehicle (there is a difference for taking co-workers to a meeting or taking people for a fee)? Do you have signs on your vehicle? The answers to the follow up questions will determine if your vehicle can stay on your personal policy or if it has to be on a business auto policy.
Expect to pay 25-35% more for business use over pleasure use if the vehicle is able to stay on your personal auto policy. Some companies may be more but that is the average in my area. I am not sure of the business auto rates but I have had someone move their vehicle from a personal policy to a business auto policy & the premium was actually less with higher liability limits.