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I'm sure the owners have their own liability policy. Any mortgage requires it. They're just looking for you to share the burden if any lawsuits pop up.
I've never gotten any interest on a deposit, and many of the apartment complexes actively defraud people by charging jacked up prices to fix or clean things that don't need it, or are covered under normal wear and tear. (e.g. you can't charge to paint if they've been in for more then 18 months, etc.)
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