This is the type thing that makes it hard for anyone to run a business. Accidents happen, but they are not all reasons to run and report something. Then we wonder why insurance rates are so high, litigation is so prevelant and people are hesitant to agree to do the work. So long as the worker was taken care of it is between the employee and the employer. It is doubtful that the worker would sue the homeowner for the accident although I'm sure that can happen. And in this economy people are looking for work and it's jobs like this that they can get -- and if every little thing gets reported -- even those jobs won't be available...give the kid a break...
As to the question of can an 18 year old own and run a business -- even a construction business. -- the answer is yes. I agree with Maynard he probably doesn't have Workers Comp insurance -- which it used to be that unless he had more than 3 employees (or is it 5) he was not required to carry it. And it is very expensive. the rules have changed on that over the years but I think that is still the rule of thumb. So if it is just him, the 16 year old and say another 20 year old -- he is still doing what he is supposed to do because as teh "owner" he is "exempt" and he only has 2 employees. He probablly said "license" but doesn't truly understand what he is talking about. It's not like there is a checklist of what is required to run a business...most find it out through trial and error. He probably worked for another contractor and used info he heard from them but didn't really understand.
If he was working for another contractor as a sub -- their insurance will cover the kids accident and will protect the customer as well as the main contractor. Their licenses would also cover the subcontractor in this situation. A guy I dated hurt his back and filed it under WC and WC wouldn't allow him to go to the chiropractor -- only a medical doctor and then they limited how much they covered...he even said he should have said he did it at home moving furniture so he would have had more control over his healthcare.
While doing work on certain projects does require a Homebuilder's License or a General Contractor's License -- he is not and will not be the last "contractor" out there trying to earn a living doing the best he can. He should have a City Business License and a State Business license -- that is where the tax revenue comes from -- not the HOmebuilders or GC license. Insurance of any kind -- liability or WC is not required unless there are X employees. But it is better to be safe than sorry and many learn that the hard way. Again this economy dictates what is "necessity" and what is "optional" for many.
There are many good contractors that work out of the back of their pickup and do a great job and don't have insurance, licenses or anything...And when you expect General contractors or construction companies to compete with the "no overhead" and still have a cheap price -- no offense, but you get what you pay for sometimes...not all "good ol boys are good" but many that I've known over the years are worth every penny and more. My brother built a house and used a General because the size of the project required it and then my dad has worked construction most of his life. He never had employees (my brother would call it slave labor lolololol...) and he never had anything more than a business license -- unless the job required a bond. I don't even remember him ever having liability insurance. If something went wrong -- it came out of his pocket and that was the end of it. He worked on small projects on his own and for several of the bigger construction companies over the years. He is "retired" but still gets called to do certain projects by the big boys because his reputation precedes him. :-)
As far as healthcare, if the kid has health insurance maynard is right that if he tells them he did it on the job -- his private policy won't cover a dime and If he doesn't have WC -- it is out of pocket expense and that can get ugly. I'm sure the "employer" can work something out to help him out with expenses. Or if they were working under a General -- they would have options to file under their policy... Either way, it is still part of the agreement between the employer and the employee.
However, a 16 year old is required to have a Work Permit...not sure how that will affect what happened if he doesn't...