Existing situations are less likely to be reported because it has been that way for a long time.Jail is pretty extreme for a consequence, but if someone gets harmed, you could be held responsible for criminal negligence.

Renter's insurance only covers the renter's belongings, it doesn't protect you from being sued for negligence of having a pool on the property.

Even if you have hired contractors to do the work, house is in a LLC, and an umbrella policy in place I bet it will make you nervous thinking all that equity could be up for grabs if an attorney can prove negligence. 

I'd tell him that I understand his client would have to prove he injured himself on my property because of my negligence and that is going to be pretty hard to prove.

I'm sure in some areas there are people who raise the average- especially cities where they push the rent strike narrative and aren't evicting for months giving non-payers fuel to be negligent. 

Management companies will have insurance to handle attorneys, but that insurance will also generally provide that the client (the management company) cannot be acting in gross negligence or otherwise breach of duties, i.e. the insurance company is not going to pay to defend you if you are doing wrong and know/should know you are doing wrong. 3.

If you buy more expensive properties your savings will grow and the cost to maintain the license will be negligible.

Repairing an item that was clearly the tenant negligence and charging you for it ...I.e. broken door on microwave  .......you get the idea.

The cost is negligible, and offering this probably even HELPS sell the event.

And your chances of getting damaging tenants expands exponentially in this kind of venture - let's assume that your chance of getting a negligent, damaging tenant is 10%.