We've sent these pictures over to our landlord, and explained some of our concerns, and asked to meet with him to discuss how he planned to protect his investment in the home, and what that would look like for us, should we mutually agree to extend the lease for another 12 months. 

Insurance doesn’t protect you from any part of the sale or acquisition of a property (e.x.

Are you personally protected if a tenant has "a good case" against you?

Criminals are not a protected class.

Does anyone have suggestions for protecting my personal assets from liability in a way that doesn't violate the terms of the loan?

You would defer a lot of taxes, have a spendthrift trust that would protect your family long after your grandchildren are gone and you could earn substantial returns on the loans you make which would be serviced by a 3rd party company.

Now with more tenant protection laws this may not be an easy play. 

Do you find LLC's to be useful or not with your real estate investments? 

You need to assume summer vacancy with no income.You need to have latest fire protection system and carry ample liability insurance. 

What are something think I should do to protect myself/ any advise on the whole deal is appreciated!