I would like to protect myself in case the prior owner is not maintaining insurance (they are BK after all) between now and when I get the deed, in the event lighting strikes, there's a fire, a tree falls on the house etc.

I guess I want to throw a wrench in this post due to the striking similarities to me.

(Strike that - GREAT!)

I had tried that avenue, but I couldn't find a way for a win-win situation to strike, it might be that I value my time and just like an investor, I won't do anything if it's not worth it.

Oh and I forgot to mention that our offer price was probably $300-400k above our strike price.

Khan just strikes me as someone who is different and combined with the city will work to get things done. 

Go to any UD court and watch the judge strike down LLs attempting to collect late fees from last year, or past due rents prior to the 3 day pay or quit.

You need to state the parties to the agreement, the legal description of the subject property, the purchase price or strike price as known in other options that is to be paid for the property, the consideration paid for the right to purchase (equitqble and legal consideration, not this ten dollar stuff if you want it to hold up) being the option price and the term of the option, it must have a date the option expires.

I just bought another one this morning on DIG with a strike of 65 (currently 62).

Strike up a conversation if you have the time.