Liquid funds invest in very short-term debt instruments (typically less than 90 days debt) - hence interest rate risk is relatively lower.
Are they safer? Yes they are. Compared to other debt funds and equity funds they are safer.
Are they 100% safe? No. Apart from interest rate risk, liquid funds can also face the risk of default. One recent example is that of Taurus Liquid Fund. They had unhealthy exposure to a low rated debt from a company that went down. As a result, it fell more than 7% in a day. Although I don't know if a liquid fund has ever been suspended.