Are you looking to minimize risk and liability if the carpenter gets injured and becomes a cripple for life on your property?

As it stands if there is a fire and someone is injured the property owner can be in big trouble.

As a policy;never rent to close friendsnor employeesIt WILL become divisive and you will injure the relationship

I don't often hear about people using S-Corps, but that is a question for the CPA.The reason: if someone injures themselves on your property, it will be harder for them to come after your personal assets if that property is in an LLC. 

and a tenant or visitor is otherwise injured or suffers significant property damage, don't think for one second they will hesitate to go after everything you have. 

If he injures himself or damages the property or hurts a tenant by accident, whats the best contract to have in place?

I am not saying don't do the work,  I just suggest budgeting full offload of rehab just in case (burnt out,  injured,  etc).  

Here's, by the numbers your actual risk, car accident, questionable fault, but a child is profoundly injured in the other car, and the jury will be sympathetic.

If the do not have coverage the injured party will try to find some reason to make it your fault

It would also be more beneficial for my family should I become seriously injured, ill or pass away.Over the years I have seen property values rise and fall with the economy.