From what I understand, they will not need a license (as it will be under 5 kids) and my insurance company believes the umbrella would be sufficient. 

@Handie Kunen,Try not to let paralysis vs analysis keep you from pursuing an apartment deal.Why are you talking about operating agreement and sample deal package (unless you are using OPM) because those are not necessary to purchase a deal.The reality is all you need to do is underwrite deals, maybe a 100 or more with BP calculator, and when you find one where the numbers work then make an offer and sign purchase agreement.All other steps for due diligence to closing can be found in Multi-Family millions, that's it.I spent a year worrying about land trusts, LLC's instead of closing deals.Buy a large umbrella policy for now, close on a cash flowing deal, and if you want "perfect" structure in the future adjust accordingly.Best of luck!

You can read about this question quite a bit here on BP, but what most people do when they are starting out is they get an umbrella policy. 

But we found out it doesn't really help in any way at our level, other than public records not showing your real name, so we cancelled it and just got an umbrella policy.

Whichever way you go, insurance is the first firewall and you'll need plenty of liability coverage and an umbrella liability policy as well.On the LLC, many assert that it can easily pierced by a savvy lawyer, though I've not seen any good examples of this occurring.

Question: does umbrella insurance together with owning the properties in LLC provide sufficient protection against potential lawsuits from tenants?

Insurance would be easier too as properties were acquired if you used an umbrella initially.

I was hoping to add another layer of protection to my personal liability, I guess ill take out and umbrella policy instead:(

If you're worth millions, then you should be having this conversation with your lawyer and not waste your time with advice from someone internet guy who may or may not know what he's talking about (even if I did handle claims for an insurance company in my previous career).Having said that, you can bump your limits up by a million and then add an umbrella policy which would provide excess coverage to all of your policies (home, car, investment property).

Not legal advise but an umbrella insurance policy never hurts. by the way GET THE WORK PERMITTED