When I teach the introductory finance class, I teach my students that limited liability is one of the reasons corporations comprise most of the really large firms (rather than sole proprietorships or partnerships). To show the downside of not having limited liability, I give a examples of stupid lawsuits, or examples of product warnings that thwart the evolutionary process.
M-LAW's annual Wacky Warnings awards provide a lot of good examples of stupid product warnings. This year's winner: A heat gun and paint remover that produces temperatures of 1,000 degrees and warns users.
The warning? "Do not use this tool as a hair dryer"