An LLC does protect my personal assets if my partner or an employee is negligent and/or causes the LLC to be named in a suit.

If the HOA was somehow deliberately negligent, the insurance company may not pay and, as you suspect, this could bankrupt the entire community.If the plaintiff is claiming there is a health problem, I'd personally bail on this.  

The PM would need to be more than simply negligent -- something like grossly negligent or even willful, it depends on the agreement -- otherwise no chance for recovery.Nobody here is saying the PM did their job perfectly... but the liability for this fiasco falls on the tenant kicking doors down.

Would you want negligent actions on your part causing a risk to somoene's health?

We obviously both agree that it's impossible to get the service turned on same day, which shows negligence upon the landlord, not the new tenant.  

Now that doesn't take into account stock options EXP provides, but I see that as negligible. 

Call me crazy, but I'm getting the vibe she's pointing fingers at me and trying to make it seem like I'm negligent.

I'm sure you could find one anecdotal example of where a party threatened to file suit or actually did so, but that is so far and in-between that the risk is negligible unless you are negotiating a very high dollar deal.Sometimes that works out good for the buyer, like when they "waive inspection" but still do an inspection anyway and want to cancel, or have multiple offers accepted. 

The expense ratio on etfs is negligible.

You could be sued for negligence if there is an unsafe condition and you are not handling it and a tenant (or their guest) gets injured, be careful.