Adapt itInsurance-  make sure your property and liability insurance provider is geared towards your business and not just the same one you use for personal.  

There is a ton of liability still with that option. 

Its just outside of their normal scope of work and it only increases their liability.

One false move on your part could jeopardize your entire claim and expose you to potential liability.

You're in business to make a reasonable profit without exposing yourself to liability.

Single LLC: Easier to manage but pools liability risk across all properties.

You need general liability and builders risk coverage. 

What they bought was a liability....maybe paying taxes, maybe paying HOA/POA dues, then dividing it between 10 kids when they die, so now really worth nothing, but a headache.#2. 

You should have an umbrella policy to cover everything, beyond maximum liability coverages.

A good way to avoid this in this future is to use a vendor worksheet/package that request the pertinent contact information along with a document request for the filed out W-9, copy of business license, Worker comp and liability insurance certificates.