I am stumped as to if it is worth it to get a business bank account or just open a normal checking and savings account. 

How would I credit check his co-signer?

I believe that the current ordinance only allows STRs in the CBD so I would check first if it is allowed in your area.Regarding insurance, check with your current insurer to see if they have any offerings and check with those that @John Underwood mentioned as well. 

For example, we do background checks but no proof of income/employment check.

Just ran my 1st REIPrintMail campaign and mailed out 1300 check offer letters. 

Full application and all associated checks.

They have a bathroom included but it was not disclosed that we should check on the status or anything like that. we assumed everything was permitted. 

Quote from @Jeff Calcaterra: We have a potential tenant new to the area who has gone through a paid background check, signed a background check authorization form, sent us a LinkedIn profile, sent an offer letter and says he is willing to send us paycheck stubs, but says he doesn't want us to call HR to verify employment because he is supposed to have found housing already.

.🚨 More Lease Enforcement Challenges – Handling disputes, unauthorized guests, or noise complaints becomes more complicated with multiple unrelated tenants.Why Proper Screening is Critical:Not all background checks are the same!

As a landlord, Zillow provides you with a background check, credit score, and a well-formatted application for each applicant.