I'd argue the opposite. If they're afraid of libel, they're probably engaging in it and should stop.
If they're sure of what they're saying and have proof of due diligence, they shouldn't be afraid. If they're not sure, they might still want to publish the information but be clear and explicit that they have no proof and state how they got hold of the information.
Saying "I heard but haven't been able to verify that Person X did Thing Y" is very different from saying "Person X did Thing Y". The latter should absolutely be liable to a suit if they don't have proof or very strong evidence that it actually happened. The former shouldn't as much.
Disclaimer, IANAL so I can't tell if libel laws in different countries work that way but I would expect them to do so at least in broad terms.
In the US, the OP is probably enough example. If you can't let your kids play outside or walk the streets for fear of being accused of child abuse, endangerment or whatever charges might be made against you, that's the symptom of worrying societal illness.
I grew up in America - in the southern part of the continent though, not in the USA. I now live Europe. Kids roam and play outside and that's a normal thing.
Kids need to be allowed to be kids, otherwise they will grow up to be very limited adults with odd world views. Perhaps everything else stems from this, at least partially? Kids who grow up overprotected might feel they need to overly protect everyone as an adult, and these adults will be the ones behind laws and regulations.
That may depend on the jurisdiction.
My understanding is that libel laws in the UK, for instance, are horribly broad, and, importantly, don't actually take the truth into account. (From what I've read, I would say it would be more apt to call them "defamation laws", but no one put me in charge.)
So if it were as simple as "just don't print verifiable lies", then I'd tend to agree with you, but given that there are places where you can print verifiable truth and still get slapped with a successful libel suit for it...
This thread is about where we (as societies) are being overly safe.
I certainly agree that governmental gridlock and dysfunction exist. However, that alone doesn't explain why large infrastructure projects like rail cost $5 to 10x more in the US when they do make it through the process. Infrastructure projects have vastly higher headcount then even in the EU. You have paid professionals whose job it is to make sure that Builders don't step on endangered animals. This obsession with preventing the risk ignores the fact that it would be both cheaper and better for the animals assume some will die and spend part of the money you would be paying to prevent that on actually helping them.
If kids can't play outside anymore because of overprotective parents or an overprotective society, that feels to me like a net negative. If newspapers are afraid to publish because they are fearful of libel suits, then we might miss fact-checked stories that are in the public interest, and it's not clear that that's a good trade-off.
On the other hand, zero traffic death policies usually result in fairly cheap and only mildly inconvenient interventions (if inconvenient at all) to improve the legibility of key intersections and dangerous roads. Drives to reduce medical error usually rely on increased training or the introduction of fixed procedures or checklists, quick wins. Safety regulations in construction require proper dust extraction and safety at heights, and really the cost in better ladders, scaffolding, safety harnesses, vacuums and so on is completely negligible compared against the occupational hazards and chronic illnesses often suffered by older construction workers.
(And sometimes it's debatable. I feel like NASA could take a bigger risk on some manned missions if the astronauts agree, but on the other hand there's so much money and effort involved in these missions that it's not so strange that they want to get everything right, and that feels like the right culture and attitude. I feel like you should probably be allowed to swim anywhere you want even in still water or when there's algae, at your own peril, but really it's not that much of an inconvenience to go to a safer spot with a lifeguard.)
My impression is that what really ails Western societies is not necessarily risk averseness but rather gridlock, where a small amount of people can block a lot of progress for the rest of us. Gridlock has made governments averse to big infrastructure projects (e.g. high speed trains) and big changes in regulations that could move the needle (e.g. land value taxation) but they're not really averse to the risk, they're averse to getting swamped by interest groups and influential people with a vested interest in the status quo.