ORONO — With the threat of a lawsuit from the deaths of three children in a fire last year hanging over their heads, town officials here are facing another potential problem related to the tragedy.

Three of Jennifer Nickels’ four children were killed in the December 1989 fire at their Grove Street home, a misfortune that has since led to the uprising of other issues in the town, including questions surrounding the need for more firefighters at the Fire Department.

In May, Warren Silver, a Bangor attorney representing Nickels, filed claims against the town of Orono and the Orono-Veazie Water District, which served as notice of coming lawsuits. A previous attorney representing Nickels had filed a claim against Fransway Realty Trust, owners of the home, claiming that the fire was started by faulty wiring.

Silver, who could not be reached for comment Tuesday evening, said in May that the claim against the town centered on the alleged understaffing of the Fire Department. During recent budget deliberations, the Town Council voted to hire three new firefighters.

In a June 22 letter to Town Manager Bruce A. Locke, Arthur J. Leary of Commercial Union Insurance Cos. of Manchester, N.H., informed the town that its insurance policy would not cover demands issued in the claim.

“(We) wish to advise that coverage is not afforded under this particular policy for most, if not all, of the allegations contained in the notice …,” the letter said. The claim stated that Nickels would seek a total of $5 million, which is in excess of the town’s policy.

However, Locke said Tuesday the reason for the letter was that the claim lacked specifics, and that the town’s policy would likely cover an actual lawsuit, which would be more specific and which town officials expect to be filed soon. As evidence of this, Commercial Union has hired an attorney, at its own expense, to represent the town in the matter, Locke said, although the June 22 letter suggested that the town engage its own attorney for the case as well.

Should the lawsuits be filed, the town could face additional problems. A May 29 letter from an attorney representing Fransway informed Locke of the company’s intent to file a cross claim against the town should the matter be brought to court.