The landlord should then look to the pet deposit to pay for damages caused by the dog. Just hope that the damages are not greater than your roomie's pet deposit. If it does go higher you could be in trouble. Your landlord will then probably look to the security deposit which you and your roommate put up for the balance. Hopefully this will not happen to you but it could.
Most people are quite willing to be responsible for their pet's bad behavior.
Be sure to specify who will pay for any damage done by the pet. Roommate Locator Inc.