What incentive do they have to verify all information, when they are getting paid to report erroneous information?

I would err on overcompensating the tenant.  

FCRA (Fair Credit Reporting Act) states (to paraphrase) that if credit is denied based on a credit report, you must identify and provide adequate contact information for that source in order to allow a consumer to dispute any erroneous information.

Better to err on the side of caution

If the tenants are refusing to stay there I would err on the side of caution and get them a hotel or let them out of their lease (I would offer 1 month's rent, to do the right thing)I would also do the insurance level restoration, this will need to be disclosed to the new buyer and if it was not done right, and they can prove you cheaped out it could come back to bite you

In addition, there are other reasons I would personally not invest in either property, but I do generally err on the side of caution.

You hold the erroneous belief that the US is somehow immune from market forces.

I am just looking to make sure someone does not erroneously go down the wrong path.

Leave your meat in too long and it becomes salty, so you'll want to err on the side of too little time as opposed to too much.Aside from the Thanksgiving Turkey, the other two things that I think lend well to brining are fried chicken and pork chops.

Given the choice, err on the slightly generous side.