I'm "okay" with losing money from business mistakes (e.g. contractor overcharging me), but getting scammed is the one thing I want to avoid at all cost.

Hpoefully, you've learned from this experience and will make sure EVERYTHING to meet your expectations is in writing in the management contract.In our experience, the #1 mistake landlords make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

They are making really costly mistakes, my tenants are unhappy, and I'm out thousands so far due to mis-communications, poor follow through, and neglect of maintenance requests.

I own properties in Massachusetts where there is a lot of rain and snow and basement leaking and moisture is one of the worst nightmares and dinosaurs that eat up cash for almost every property.

PROs: 1) You will learn more about how property management works, which will improve your chances of hiring a good PMC in the future.2) You will save PMC fees3) You'll know your properties better than any PMCCONs:1) You may make costly PMC mistakes: tenant screening, legal, evictions, maintenance, being too nice, not being on top of things2) More time3) You may make emotional decisions insted of business decisions

Like I mentioned, my intention is to find a new job but I am just thinking of worst case scenarios here. 

Which isn't the worst in the world. 

@Joe Villeneuve sorry my mistake.

Any suggestions  from the gurus - Re: protection from worst case scenarios?

Our biggest mistake( after that we did not put the cameras all over the house, until it would be sold ), our biggest mistake was, we never actually have read the policy, with the foolish confidence that we will never need it.