Is there any tax liability from money received due to personal injury settlement? If so, is there a way to reduce or avoid it?

If you receive compensation for the loss of a limb, that is not taxable income. Otherwise, personal injury awards might be taxable income. The only way to know for sure is to read the original complaint, response and the settlement agreement to see how the award is allocated.

Usually no. If part of it is for interest, or replacement of lost wages, or the like ,then that part likely is taxable.