When it comes to the liability of fire departments, suits for negligent firefighting concern fire chiefs and firefighters the most. Making life and death decisions in a time compressed, high-stress environment with incomplete situational awareness seems like a recipe for poor decisionmaking. These circumstances that make it easy to be second guessed afterwards if things don't turn out right.
In many jurisdictions, immunity protection serves as a shield for fire departments from being second guessed (and held liable) by courts and juries. The problem is, immunity protections are constantly under attack. A recent case in Kentucky, involving the Caneyville Volunteer Fire Department, presented a constitutional challenge to the immunity protection provided to fire departments. The challenge was based on a provision in the Kentucky state constitution that gives every person who is "wronged" a right to redress through the courts.
The case is an interesting read, looking historically at both the fire service in Kentucky and immunity laws in general. The bottom line: The Supreme Court of Kentucky upheld immunity protection for fire departments for operational activities at the scene of a fire.