Robby Jerovsek died when a 27-foot powerboat ran over the personal watercraft he was operating on Spring Lake on Sept. 5, 2009.
The boat operator, Jack McKeough, was 14 when the crash occurred.
Jack Jerovsek sued on behalf of his son's estate against McKeough's parents, Michael and Nina McKeough, who owned the boat.
The settlement calls for Robby Jerovsek's estate to receive $350,000 from the McKeoughs' insurance company and $175,000 from the insurance company for the Youngbergs, owners of the personal watercraft.
Jerovsek's passenger, Alexis Youngberg, lost her leg. Another rider was also injured.
The trial for an additional lawsuit filed by Youngberg against the McKeoughs and against Robby Jerovsek’s estate was expected to wrap up with closing arguments Friday morning.
Tribune reporter Becky Vargo contributed to this report.