Fire Damage Legal Liability Defined
Fire damage legal liability generally refers to the obligations of individuals or entities who are responsible for damages caused by fire to personal property and/or real property. Essentially, it is a common term to describe the duty not to cause unreasonable harm to the property of another due to fire damage, usually through negligence. Liability to complete strangers can arise either by statute , in the form of a building code or other regulation with which a property owner is required to comply, or at common law. The applicable common law principles are familiar to most everybody. If a person or entity is using its property unreasonably, and that unreasonable use results in injury to the property of another through fire, then liability for those damages can be imposed.
Leading Causes of Fire Damage
Electrical Faults
Electrical systems are a common cause of fire damage, and when malfunctioning wiring or appliances lead to a loss, it begs the question of liability. It could be a simple case of human error, such as a circuit being overloaded or a device malfunctioning. In rarer, more serious cases, faulty electrical work done by a contractor could spark a fire, opening up the possibility of legal action against the contractor. When a fire is caused by faulty electrical work, it may fall under the category of a "hidden defect," which involves hidden pre-existing flaws that are not discoverable with reasonable care. If the defect is discoverable, or not hidden, the contractor who made it is not likely to be held liable.
Human Negligence
One of the most basic causes of fire damage is human action or inaction, which might be careless or even malicious. Suppose a fire starts because the property owner cooked while an overgrown crusted on grease built up on the bottom or side of the oven. Intentional fires, like arson, also fall under human causes of fire. If a fire is started in an attempt to benefit by filing a fraudulent insurance claim, the negligent person may be arrested for arson and the insurance company will have no duty to pay. A property soon to be sold is in a precarious situation, because prior to the sale, a salesperson may be inclined to set the house on fire to increase fees for a quick sale. Cases like these will consider if intentional fires are within the scope of employment, meaning the individual setting the fire was acting in the best interest of making the sale happen as quickly as possible.
Natural Causes
Rare, but real, natural events that lead to fire damage, for example, lightening strikes, may also hold the potential for legal liability. A lightning strike to a power pole is an event that could lead to significant fire damage to a home. Fires sparked by these situations may even potentially start a wildfire.
Who Holds Responsibility for Fire Damage?
Liability for Fire Damage: Owners, Tenants, Manufacturing Defects and Arson
Essentially, a court will attempt to determine who was negligent and who wasn’t. If someone started a fire that spread to other property or structures, did they do so intentionally; did they do something that led to the cause of the fire or did a faulty appliance or machine malfunction in such a way that it started a fire? Were reasonable care and maintenance practices being followed or deviated from? Was the business owner aware of any issues and did they routinely inspect their property for potential fire hazards? Was more than one property owner leasing or renting the property? Or did they allow someone to operate a business on their property that resulted in burn damage elsewhere? In any one of these cases, liability will be determined by causation, whether directly or indirectly. It’s important to remember that fire damage claims that cannot be resolved between landlords and tenants or be covered by a business owner’s insurance policy might go in the opposite direction. The tenant or visitor could be financially responsible for their own medical bills and other circumstances and property owners for whatever damages were caused in the most recent incident. Courts have even held manufacturers, distributors, retailers and those that handle products in various ways responsible for faulty electrical appliances and goods that end up causing fires. In order for them to be found guilty of negligence, it must be shown that the appliance or good was defective in its design and construction, did not have adequate warnings, any defects resulted in the cause of the fire or that the manufacturer or retailer knew or should have known of the danger.
Legal Structure Surrounding Fire Damage Liability
The legal framework governing fire damage liability primarily hinges on national or regional laws that dictate how such claims should be handled. These laws often set out the parameters for recovery in the event of fire, including the amount of compensation available and the process by which a claim should be brought. For example, an action for the tort of negligence might require the claimant to show proof of legal duty, breach of that duty, and resultant damage. If there is a statutory law regulating liability in cases of fire, it will take precedence over common law principles.
Fire safety regulations may also play a significant role in determining liability. For example, in many jurisdictions, building codes and the use of fire safety standards could impose strict liability on property owners to make sure that their buildings are designed and maintained to minimize the risk of a fire starting within or spreading to neighboring structures. These may require property owners to install certain fire retardants, as well as fire detection and suppression systems, which if neglected could lead to liability.
In addition, industry standards set by organizations involved in fire safety, such as the National Fire Protection Association (NFPA) in the United States and the British Standards Institution (BSI) in the UK, may also be considered in determining liability. These standards have considerable influence when assessing whether a person or organization breached their duty of care, and whether the subsequent damage was foreseeable.
It’s also important to note that international treaties such as the Hague-Visby Rules and the Rotterdam Rules can affect liability when it comes to the transport of cargo by sea that gets damaged by fire. Other specialized conventions exist in particular areas like aviation and nuclear energy.
A detailed understanding of relevant national laws, local regulations, building code requirements, industry standards, and international conventions is necessary to determine legal liability in a fire damages case. It may also prove beneficial to obtain the services of a qualified lawyer to provide an in-depth analysis of case law precedents that might apply in a specific situation.
Role of Insurance in Fire Damage Liability
Insurance plays a key role in fire damage liability, as it often serves as the primary means by which property owners fulfil their legal responsibilities in the event of a fire on their property. In many cases, insurance policies may cover damages caused by fire, whether to the insured’s property or to the property of others. It is important to note, however, that not every insurance policy will automatically cover all fire damage.
Property owners should review their commercial property or business liability insurance policies to determine whether they cover fire damage. Similarly, in the case of a claim made against a property owner, it is essential for the property owner and their attorney to closely examine the policies that may apply to the claim to determine coverage. A business owner or property owner also may be required to purchase statutory liability insurance from certain authorities for specific types of damage on their property, such as fire.
If the insurance policy does cover fire damage, it will set out what types of damages are covered, who might bring a claim against the insured, what the policy limits are, what the insured’s deductible is, and what kind of steps the insured must take to preserve their ability to make a claim. If any property can be salvaged, the insured should take reasonable efforts to do so, failure to which may provide grounds for any other liable parties, such as their insurance carrier, to deny responsibility .
In the event of a fire, the insured can make a claim with their insurance carrier, advising the carrier of the nature of the losses and any reports made by fire authorities and fire department personnel. Depending on the severity of the damages, insurance adjusters may visit the site to assess the loss. They may confirm whether the damages fall within the scope of the policy, and may also provide guidance to the insured on how they should proceed with any remedial or salvage efforts.
The insurance claims process can be slow, and it may take some time before an insured sees any funds. Even after receiving funds, if the insured is responsible for damages to third parties, the sums may be insufficient to cover the losses, and the insured may have no way to recover the difference. It is not uncommon for an insurer to pay the limits under a policy if, for example, a fire has caused millions of dollars’ worth of damage, and the matter has become litigious. If the insured’s policy limits are reached, then the insured may have to pay for the remainder out-of-pocket. If the insured cannot pay the remainder, then it becomes necessary to explore other avenues of recovery, such as claims against potentially liable parties, and a suit against the insured may also be possible. Moreover, if the insured has multiple insurance policies, the insured or their attorney should carefully review those policies to determine whether additional coverage might be available.
Actions to Take Post Fire Incident
When a fire incident occurs, there are several steps individuals and property owners can take to ensure that their legal rights are protected and to manage potential liability.
- Call First Responders. Call the fire department and have firefighters respond to the scene of the fire, if necessary. In many states, a property owner whose premises caused the fire may be liable for damage or injury to third parties. Having firefighters respond is one way to mitigate risks associated with an incident.
- Secure the Site. If authorized by the fire marshal, property owners should secure the area to prevent others from entering or leaving the site. Authorization from the fire marshal is recommended because the fire marshal and fire department are generally the first responders to an incident. They will make determinations about the investigation and cleanup of the site.
- Consider Seeking an Arson Determination. Stipulating that an independent arson determination is required before passing along a fire loss to another party (e.g., a subcontractor) should be included in any agreements with other parties prior to a loss occurring. If there is a fire loss, however, and you believe that your agreement with a party could impose liability on that party unless the loss was caused by a fire set intentionally the party may argue that you owe the party for the loss. To avoid such an argument, consider seeking an independent arson determination to reduce liability to another party in connection with the fire loss and then negotiate a settlement with the party who may be on the hook for the entire loss, but only if the loss was caused due to a fire set intentionally by a third party.
- Preserve Evidence. Preserve all pictures and evidence of the fire loss. Take multiple pictures of the areas and materials that you intend to use to argue that a particular entity or employee caused the loss. From the photographs, you can construct a comprehensive narrative of the event. An attorney can assist you in the construction of a narrative that you can use to persuade those interested in the dispute.
- Consult with an Arson Expert. Contact an arson expert before engaging in the activity of re-constructing events. Your attorney will need to engage an arson expert to review the circumstances of the fire and prepare a narrative for you or to rebut the narrative of another party. Arson experts examine fire damage and can help ascertain the cause of a fire.
How to Prevent Fire Liability
There are numerous actions that can be taken to lower the likelihood of such incidents in the first place, leading to fewer instances of liability altogether. For example, developing and implementing a thorough set of fire safety protocols can help ensure that your building is well-equipped if a fire should ever occur. These protocols might include identifying clear emergency exit routes, designating staff members tasked with maintaining fire extinguishers and conducting regular inspections of fire alarms and other equipment.
In addition to establishing protocols for appropriate fire safety equipment, operators of commercial buildings are urged to consider creating employee training programs that address the importance of fire safety – including ensuring that daily tasks, such as cooking, storage, maintenance work, and even smoking, are being carried out in a way that minimizes the risks of fire. A prime example of this would be reminding employees that no cooking equipment and appliances should ever be left unattended.
Beyond these basic safeguards, there may also be additional steps you could take as an owner to minimize the risk of liability in case of fire. For example, should you decide to hire a contractor to take on any renovation or construction work, make sure that your contract includes a provision stating that the contractor will be liable for any liability claims that arise from fire incidents on the property as a result of their work.
Fire Damage Liability Case Studies
Case Study 1: Restaurant Fire
In the case of a fire at Ragazza Trattoria Vicolo Ristorante Italian in Cincinnati, Ohio, it appeared that everything was covered. The landlord and the tenant, Ragazza Trattoria, LLC, had both purchased liability insurance, and both policies had a "no subrogation" clause. That meant neither could seek to recover damages from the other’s insurer in the event of a loss.
In 2010, an electrical fire broke out and severely damaged the restaurant. Investigators traced the source back to a faulty circuit. When Ragazza sought to be indemnified by the landlord’s insurance, it didn’t pan out. Ragazza filed a lawsuit against the landlord, alleging breach of contract in that it failed to provide suitable premises for operation of a restaurant, among other things. The case went to trial and eventually settlement discussions were held, leading the parties to agree to a partial settlement that netted Ragazza approximately $160,000 .
Case Study 2: Apartment Fire
In March of 2008, the owner of an apartment building in Massachusetts sued a woman tenant who lost control of her space heater one January night; the heater caught fire, spreading to cause half a million dollars in damage to the building and forcing a dozen tenants out of their homes. The suit claimed negligence on the tenant’s part and sought recovery of the costs to repair the units.
The tenant countered that she was also entitled to recover the costs of the hotel in which she was forced to stay, a counterclaim not decided until nearly a year later. In that decision, the judge stated that there is no legal obligation for the tenant to reimburse the landlord for the cost of a hotel, nor could the landlord recover that expense from the tenant since the lease didn’t provide for reimbursement of temporary housing in the event of a fire.
This case highlights the tendency for those affected by fires to sidestep fire damage liability and focus solely on the acquisition of insurance, which is a mistake that can cost them dearly.