What damages am I liable for in this situation? Can my employer take from my pay?

I am a foreman for a painting company. My crew just pressure washed an apartment complex to prep for paint.. The faucet they used apparently has been broken for years (leaky pipe) and when they used it, the abutting apartment got "flooded" - the carpet got wet. The renter was home, saw the water, ran out, and we turned off the faucet. The damages were just cleaning the carpet and airing out the floorboards, and patching the sheetrock, but ran a couple thousand.

The owner of the complex did not disclose the faucet was broken and not to be used, and even admitted she knew it had been broken for over 11 years! Well, my boss (the owner of the company) said not to worry about it that it was the apartment owner's fault and liability. He said to finish the paint job and not give the water thing a second thought.

Well, normally one would think that the insurance company for the complex and the insurance company for the company would work out liability, and one or the other would pay for the damages. I am not sure why, but apparently nobody wants to go through insurance. The apartment owner demands the company I work for pay for the damages (since we used the faucet). My boss, wanting additional work on other apartment buildings owned by these people, agrees that our company will pay for the cleaning bill.

He then tells me it is coming out of MY paycheck!!!! Can he do that? Am I really liable?

He is literally going to refuse to pay me the majority of my paycheck! What can I do, or am I truly liable. I had no idea the faucet was broken, it was an internal leak and not something we could see from the outside, and nobody told us not to use it, plus the landlord did not disclose the faulty facet even though she knew we would be pressure washing and needed water, and I am an employee, not a partner or anything in the company! Do employees need to be worried about stuff like this? Should employees get their own liability insurance?