Insurance policies and LLCs are designed to help after an incident has taken place and both should be considered, but a thorough assessment of risks and a plan to mitigate those risks will help prevent an incident in the first place making both you and the potential victim better off.I think the choice of insurance or LLC is a personal decision based on your appetite for risk (which is why I try to gain more control and focus strongly on mitigation strategies).

I call the bank's loss mitigation department and they said to get any info or begin the negotiations, I need to be added as an authorized user.

Your cost to acquire project entitlements would be limited to; third party cost, any option fees paid to the landowner plus the value you place on your time (which includes your learning experience).Investing your time and a defined cost as noted above mitigates your concerns about risk because it's knowable and tolerable.

FICO, mid 700s, $450k+ net worth, low debt ratio, four pieces of real estate held free and clear, no other mitigating factors. 

I have provided the 4-point & wind mitigation reports from my home inspection on this foreclosure to the prospective insurance carriers - both in good standing.You guys who purchase foreclosures for the purpose of hold & rent, who do you use for landlord / property insurance?

To mitigate this, masonry walls should have vertical expansion joints every 25 feet or so. 

Is this how you personally mitigate your risk or is this actually a requirement of lenders to handle it this way?  

It is nice to see a solid cash flow deal and good for you for asking advice, it never hurts and actually allows you to mitigate risk.

We don't have neg am loans any more and while stated loans are creeping back up, ATR (ability to repay) rules, AMC's for appraisals,  and other measures in place should at least mitigate the fake valuations from exploding and tanking the market.

Re point #4, the idea is to try to mitigate risk by buying at a price below the regular MLS market (although it has other risks).