Man this is a bad situation. I will echo what most are saying.

you and the wife need to sit down and define your positions in the company. You then need to set the ground rules for the company. You both need to follow the rules of the company and the positions that you except. I would suggest one of you run the ops and the other the business. Sounds like your wife should run the ops. She will learn a few things about the problems of catering to the employees, and the workers love her so although they will try and take advantage they will not do so too badly.

You run the business and look out for the business. She will need to know that things like insurance are important to the business and as such policy must be followed. You will have to leave discipline to her. So if the truck is damaged it needs to be reported, if the employee messed up she will have to take care of it. You should have a say but the end decision should be hers. If the employee continues to mess up it would be your job from the point of view of protecting the company to ask her to let him go.