My wife got a 1099-misc box 3 from an insurance co related to maternity leave. turbo tax is classifying this as self employed. How to correct for that?

You correct it by using the following steps because this income is not business income, rather miscellaneous as indicated by your Form 1099-MISC. 

It's important for you to select 'None of these apply" and then you should also select the following:

'No' on the screen 'Did the '____' involve work that's like your main job?'

'No' on the screen 'Did the '____'  involve an intent to earn money?'

This will report the income without any business activity and it will show up on Form 1040, Line 8 (From Schedule 1, Line 8z).

1. From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)
2. Select Tax Tools 
3. On the drop-down select Tools 
4. On the pop-up menu titled “Tools Center”, select View Tax Summary 
5. On the left sidebar, select Preview my 1040 

For TurboTax Desktop, change to 'Forms' and review the forms