I am not sure what the penalty is, or if I will recover my losses due to their negligence.

The cost is negligible in my opinion.  

Charge for the years of life that you are losing due to the tenant's negligence which resulted in the damage.Use the "Search BiggerPockets" box to find many forum threads about cleaning up after dogs, cats, pets, etc. 

Are you willing and able to dismiss a team member for negligence?

First of all, why am I responsible if a tile guy is negligent and cuts himself?

I can't believe they haven't been sued for negligence..

Imagine you have a 100K property, are grossly negligent, a child dies and you get sued (and lose) a 3M lawsuit.

I am in the process of doing a quitclaim deed from one LLC to another (both mine) and those are the costs I am taking, so can't be far off... and yes, they are negligible

In fact, I operate rentals, and at one point, some active businesses and liability is the MOST important.When you have rentals and businesses, you have people suing you, for whatever reason,  from scammers, to clumsy old ladies for trips and falls outside your building to tenants having a break-in  and blaming you for negligence. 

In my opinion, if you have a tenant injured or worse by CO there isn't a jury on earth that would not find you negligent in civil or criminal court.