A counterpoint might be that binding private enterprise by strict liability rules might coerce it to be extra cautious not to cut corners that lead to fires -- as opposed to a state owned company which might have less to fear from lax practices.
Although, it's debatable how avoidable starting fires is in the bone-dry tinderbox of 21st-century California, even if you stick closely to best practices.
What you describe is exactly what PG&E is today. Those strict liability rules did not prevent them from cutting corners. They estimate damages at 15B and their insurance and assets are worth $5B. So do the math.... taxpayers will have to pay for rebuilding and if PG&E survives will they pass costs on to rate payers (aka the same people whose houses burnt down) or will they tax PG&E more or ?. Maybe PG&E will become insurance company owned since they will owe the insurers tons of money since they can't pay out for liability.
Although, it's debatable how avoidable starting fires is in the bone-dry tinderbox of 21st-century California, even if you stick closely to best practices.