How do you know he doesn't have insurance? Is insurance required by law?
Part 107 isn't a very big barrier. What if he ends up getting it? Will you that give you more business?
The point is right now as of this moment in time he isn't flying legally because he doesn't have his 107 certification. No getting your 107 isn't a huge barrier if you are willing to study and pay to take the exam, but that is just the point this person has not done that and is out there doing something that is illegal under the current laws. If he ends up getting it great, but it isn't retroactive so legally everything he did prior to getting his 107 is still illegal and he could still be prosecuted if the FAA chose to do so.
The point of the whole thing is here is someone, no matter how good they are or how big of a business they are doing, is going about it totally illegally and it isn't fair to those of us out here who do obey the rules and get all the permits, licenses, insurance, and everything else that goes along with running a legal business.
So let's say for instance this guy was running a limousine service, acting as owner and driver, and he didn't have a commercial drivers license and didn't carry the correct level of insurance for the business in which he was engaged. So is that perfectly fine? Would it be ok if he did it for a while and built up a huge business (with no accidents or complaints) and then once he decided he wanted to get his commercial drivers license he went out and did it and business went on as usual?
Let's think about this same scenario as well concerning insurance, what if one of your family hired this guy with no CDL and no Insurance and then they got in a wreck and someone was injured or heaven forbid killed, would it be ok that he didn't have everything needed? Let's look at it now from the UAV business side of things. NO, there isn't anything that "requires" you to buy insurance, but why would anyone hire someone that doesn't have insurance. What if he was flying over the car dealership to do a commercial for them and crashes into a car or the building or hits a customer? Who is going to pay out the claims? Or what if he was doing a realty job on a million dollar home and flew into the huge glass window in the front and in the process the drone or shards of glass knocked over a candle on the table underneath, it started a fire and burnt the house to the ground before the fire department could come. I know that is a really crazy extreme, but anything and everything is almost possible when it comes to accidents. So what do you do? This guy has no insurance and no license so would it make it right if he went back after the fact and got it?
Just do the right thing. I have been flying for 2 years without a license, but in all that time I haven't done anything commercially. I have had people ask me to do some things. I have had people want to buy some photos. I have had people ask me why I didn't try to monetize my YouTube channels. Each and every time I said no or didn't do anything that would put me in that commercial category, because it wasn't legal for me to do that and I didn't want any repercussions to come back on me if I did. But it is game on now!