Will the premium cover those?

You still need to have reserves to cover those eventual costs.  5% to 8% depending on the current condition and life expectancy.Good luck.  

I add 15% to my Rehab budget to cover potential cost over runs and delays.  

The current rent covers the bare essentials.

My husband went from W2 to self employed while working for the exact same company doing the exact same thing with a significant investment portfolio and enough income to cover the mortgage many times over, and was denied for a loan because he didn't have 2 years of self-employment tax returns. 

I strongly recommend that you prepare for heavy sales pitches.

Otherwise, this is not a covered loss if the house is NOT in a  flood plane (meaning you were not required to carry flood insurance with the mortgage). 

Of course, then you won't have anything leftover to cover any damages, which is why most leases prohibit tenants from using it as payment for the last month's rent.

I am covered on flips... but what about all the company, employee and team liability coverage.   

I’d like to get her a safe place to live but can’t afford to cover the difference if she can’t pay market rent, so this seems like an ideal solution to keep her housed and safe.