Q: A friend is helping me out with my business, but he's not my employee.

A: If he's doing work for you he is still what is quaintly (or not so quaintly) called your "servant" and if he gets into anything on the job then it's your baby. If it's your vehicle he's covered, though I assume you thought of mentioning to insurance your vehicle is used partly in your business etc. But does your business need a liability policy? Might be a good idea.

A: He'd most likely be deemed your agent. If he's using your car, make sure it's insured for business use under these circumstances. If he uses his, make sure of the same.

A: Your question falls under the legal umbrella of vicarious liability, which holds that a principal (employer) must pay for the accidental wrongs of his agent (employee) if those wrongs were committed while the agent was acting in furtherance of his principal's objectives. Whether your friend falls into this category will depend upon the facts and circumstances that exist at the time a harm is caused. If your friend causes a car accident that results in harm beyond his own insurance coverage while he is on an errand for you, rest assured the lawyer for the injured person will attempt to prove vicarious liability. You would be smart to: (1) form a corporation or LLC in order to protect your personal assets from business liabilities; (2) obtain proper workers comp insurance for any employees working in your business; and (3) purchase proper liability insurance for your business.