Also found a lawsuit over a possible inheritance issue, could be Veerrryy interesting.

This is basically a home with a "mother-in-law-suite", right? 

You can always get SFR with an ADU or mother-in-law suite.  

This was not the first lawsuit against this originator and this had been going on for years.

Animals for the most part are not controllable at some degree, a great dog/cat can bite playing around so how do you protect yourself from lawsuits?. 

Is this a lawsuit issue or because he won't give us back our keys, is it a police issue?

You will almost always have to file an ejectment lawsuit. 

Sole Propriety legalities here: http://www.biggerpockets.com/forums/52/topics/75182I am wondering if anyone can recommend liability insurance policies I can look at for individuals and corporations to cover law suits like negligence.

Having a business structure in place designed for asset protection discourages the lawsuits from being filed in the first place. 

Your risk of getting caught up in a traffic accident law suit are probably greater...