Define inspector. Do you mean the lenders appraiser or the home inspector that you hired on your own? Appraisers are not trained to identify obscure problems. The purpose of the appraisal is not to "warrant" the property or offer an opinion as to the structural soundness of the home. If the fire damage was obscured in some way, or not in plain sight, the appraiser wouldn't have noticed it. This does not necessarily mean that the law holds them harmless. In part, I think it depends on whether you have conventnional financing or FHA/VA financing but I might be wrong.
There is, however, no question that the home inspector assumes a certain amount of liability. In fact, there biggest expense is probably liability insurance.
The seller is required by law to disclose everything he/she knows about the property so there is no question that S is liable.
That said, I am not an attorney so waite for additional comments from one of the attorneys on this sight.