Yes, liquid smoke is safe for consumption as long as you know what you are buying.
Rumors on the internet often label liquid-smoke as a chemical-ridden substance that is dangerous to your health. But the reality is that liquid smoke is just as safe as smoking your food since it is only regular smoke suspended in water. In fact, since the smoke is in liquid form, you can control how much of it you add to your food.
Sometimes manufacturers add chemical preservatives and other flavoring ingredients to liquid smoke. This may be a problem if you are sensitive to the additives. However, this is nothing out of the ordinary. The food colors and preservatives used are certified as food-safe. Other ingredients added include sugar, molasses, vinegar, etc. So if you make sure to read the label, you should be okay.
If you want to be absolutely sure of what you are putting in your body, you can always make your own liquid smoke.