Posted by John Merchant on December 23, 2007 at 10:02:06:
Appears you are open to lawsuit for negligence in allowing/causing the fire next door.
So now, post-fire, I’d try to contact and work out a settlement with the next-door neighbor before you get into the lawsuit stage and have his lawyers to deal with.
If he had his own HO policy, including fire insurance, then that co., if it’s paid any claims or is going to, will own the subrogation rights and will be the entity you’ll be dealing with re your liability for the fire and damages.
e.g. once my HO ins. co. pays a claim to me for a fire in my house, it’s going to look around and sue anybody it can to recoup its losses.
And if it catches you in its radar as the dirty-dog that caused the fire, then you’re the target of opportunity.
Some obvious (now, when its too late 
precautions you might have taken…first, liability ins. policy covering yourself for any such damages you might cause.
Normally this would be part of your HO ins. policy and would simply be added onto it by your ins. agent at your request.
Second, acquire the fixer house in the name of your LLC so YOU aren’t named in any lawsuit.
Third, if your fix-up is going to utilize other contractors, make sure ahead of time they’re lic., bonded and insured so they’d be able to cover any damages they might cause. The time to make sure this is the case is when you’re taking their bids for their work to be done. Don’t take their bid and then try to change it as that’s too late.
Good luck successfully settling this thing peaceably.