The wording was added to provide a sense of limited liability in the situation where you have 4 - 5 students sharing a house with guarantors who do not know the other students or their guarantors.  

This has worked out well and both parties have been happy, as we get the cash needed and our investors get to be a limited partner, so he has no liability and ultimately works for him.

And my second question is, what type of liability does this open me up to with regard to my PM forcing me to spend money?

Is there any other liability involved? 

You will never actually benefit financially since a personal home is a liability. 

Homeowner's, Title,  Mortgage, Flood, Liability, Unit Owner's Renters... are all different types of insurance policies covering very different things. 

When a seller covers up or misrepresents something, an inspection doesn't release them from liability.

. - A paid off mortgage on your personal residence is not a return at all but a liability, at least until the point you sell and that assumes appreciation that outpaced inflation.

cost depend on requirements from the state level county level to the local towns, insurance ie work and comp liability and depending may need additional coverage, some municipalities require the company to put up a bond to obtain a license, now the licenses, again depends, some states require town, county and state level license or permit to operate. equipment and tools, you buy the tools you use the most and rent the ones you use ever so often until you build enough capitol to buy them. you can start with as little as a few grand to 10s of thousands, all depends on what your looking to do and what the requirements are to get it going

Unfortunately, your agent does not have access to a proper policy, so they need to hobble this one together.You should get a commercial policy listing the LLC as the Named Insured with a $1M limit, which is standard for a commercial policy.Regarding your coverage concerns, the General Liability policy covers you agains Bodily Injury and would help defend you in a claim resulting from PM negligence.The Property policy would cover fire damage and most water related claims, except flood.You would need to buy a separate flood policy to get this coverage.