I am not an agent, but after doing a bunch of deals, I have seen many situations occur. 

The first pillar is avoiding unnecessary and risky activities (don't drink and drive, insurance generally won’t cover your poor decisions) and take good care of your investments - these simple steps will help you prevent lawsuits before they even occur.

When it comes to an interested applicant's credit history, you really want to make sure you're getting the best overview of what types of revolving balances they have, monthly commitments, payment statuses, etc), and there's a way you can do so without harming their credit score (more on that in a bit).The big reason why this is important is your ability to make a judgment in the best interest of your business (ex. a prospective tenant might have been an irresponsible young college student who maybe overspent on that first credit card a few years back, but if they're well into their career and have on-time payments, a full breakdown of that credit report will provide you with further insight than just a score).

It covers the fact that the property is sitting there vacant and that during rehab things might go missing (tool & materials thefts) or damages / injuries could occur (like a fire).

Like the previous poster mentioned, I don't want damage to occur to the property nor do I want to have the previous owner be taken from the home by force.

That, combined with regular inspections, and cooperative tenants reporting leaks THE MOMENT THEY OCCUR, should help Landlord be proactive.

It gives more wiggle room for repairs on your first property in case any unexpected occurances may happen when you buy.

@Jason Gilroy I think a lot of your outcome will depend on the state that this occurred.

How long has it been since the water/moisture occurred/entered the building? 

@Ryan Adams The reason policies have vacancy clauses is exactly what’s happened here....in a avacant property when a water leak occurs it can go on for weeks without being detected, as opposed to almost immediately if someone lived there.