Licensed contractors vs doing the work yourself

[Curt Bixel]

I am thinking about purchasing a property in need of serious rehab and am curious about the liability aspects of doing work myself on a property vs using licensed contractors vs pulling permits.  

My understanding tells me that doing the work myself leaves me open to the absolute highest level of liability, and that having a licensed contractor do the work and pull all permits for everything results in the lowest level of liability.

I am curious on peoples thoughts on the third option that people seem to consider which is using licensed contractors, but not pulling permits for everything.  

For example, what about using a licensed electrician to do all electrical work and bringing the entire electrical system up to code, but doing the plumbing and drywall myself and not pull permits.  

I think some people consider this really sketchy and illegal, at the same time, from what I can gather, it seems to be rather common practice.