My office manager, when she was *just* a client, was badly injured in a head-on collision (over ten years ago).  She had to go thru an attorney to get a reasonable settlement. The F 1099 showed up with the amount as NEC.   I still remember the battle I went thru to get it corrected.  

I'd get it corrected rather than the in/out on Schedule C just in case there are any questions two/three years from now.  The Company might not still be in business then.