Do you have CDL's and/or a livery driver's license? How about state authorized livery vehicles? The laws may vary from state to state, but for the kinds of transports you're talking about, similar requirements to a taxi service apply. In the case of "medically necessary" transports, such as the bed-confined or oxygen dependent population, you would have to become a fully licensed/certified ambulance service the EMT-B level or higher.
You need to check with your local emergency response squads. Before a Certificate to operate (if required for BLSFR in your state) is issued, the state will often ask for their approval. And I don't believe this question meant 'practice' certificates, as in your CFR/EMR certification card. What is meant, is a certificate of need/public convenience/whatever your area calls it, which essentially means that the State agrees that this service is needed/will be useful, and authorizes you to run the service. Without said certificate, you simply cannot operate. The State office of EMS would have more information on this process.
No, you don't already have the insurance on your vehicles, I would guess. Standard automobile insurance WILL NOT cover your response to emergency incidents. It REALLY won't cover you if you do the non-emergency transport thingy you were talking about as well. If they find out you're doing this, they'll drop you like a hot potato. You need to purchase coverage through one of only a few specialized insurance plans that covers authorized emergency vehicles. It WILL cost more than your standard coverage.
As for malpractice insurance, there's a few different options. I personally have a policy through HPSO, but I don't know if they issue agency policies, which is what you would need. It's around $200 a year for Paramedic-level coverage, I have no idea what personal EMR/EMT-B level coverage would cost (I never got my own coverage until I had the stuff I could REALLY hurt people with, just relied on my employer).
Do you know anything about billing insurance carriers? It's not that easy. You have to have a certificate to operate and all the other necessary stuff. You would need to legally incorporate. Once that is done, you'd have to apply to CMS for a Medicare billing number (since most of the folks you're talking about transporting would be on Medicare). Once that's issued, you can apply to the State for a Medicaid billing number. You can't bill either program without their respective billing numbers.
I hate to break it to you, but there will most likely be a cost to this. Municipalities/counties, depending on your state, are often required to take 911 calls, but they often have no legal obligation to provide dispatching services, at least for free. Even if the dispatching service is free, radios/pagers will set you back THOUSANDS of dollars. I can guarantee those won't be free.
You probably need to rethink the above. Just getting this off the ground could be in excess of $100,000. I would suspect that your personal vehicles would not be approved for use (there are some states that would allow it, but your insurance carrier may not). Even if your personal vehicle were approved for use, do you want the PERSONAL liability attached to using it? There's a certain level of protection if you have a "company owned" vehicle for use instead. Portable radios are easily $500 each. Tone-activated pagers are around $400 each last I knew. I have no clue how much a mobile radio for your response vehicle would cost.
As for supplies, sure, disposable supplies are pretty cheap. But I guarantee that your state has a "minimum equipment list" for BLSFR services. This would almost certainly include non-disposable, durable supplies that will quickly add up. Among them include an AED, probably a short board or KED, and some sort of portable suction unit. Those three things alone will set you back almost $4,000 easily.
But that's not you said. You did in fact allude to getting paid for non-emergency transports. The problem is, the non-emergency medical transport industry and the BLSFR 'industry' are two completely separate things. You would need to be separately licensed for each. You would probably need different vehicles for each.
I realize you think everybody's jumping on your back, but we're just trying to give you a dose of reality. If there's truly a need for either of these things, you can make it happen, but it can't be just your buddy and yourself. It really truly would take total community involvement. The reason that some people are jumping at you is that you described it from the outset as a "business." The word business has a connotation that a profit is involved. Most of us understand that is not necessarily the case, but in the context you used it, it certainly sounded as if you wanted to make a profit. A better term would have been a "service" or "non-profit" etc., if you really don't intend to make money.
I wish you luck in your endeavors, but I would strongly suggest thinking this over more before you jump in with both feet.