Another poster has already mentioned liability. It is worth it to do some research on how a student's accident might affect your net worth and your retirement.
Young, broke CFI's don't have much to lose. People who are older not only are worth going after, they may not have time to rebuild the retirement account so that is a double risk that you might want to put some numbers on.
How many CFI's get sued? I have no idea. Maybe not enough to worry about. But the only one who matters is if you get sued. You don't even have to lose to incur legal costs.
On the other hand, if you are a CFI, you can write off some aviation materials and so forth as a cost of doing business.