Interactions between liquid crystal molecules and target analytes open up various biosensing applications for quick screening and point-of-care applications. In this review, we categorized biosensors by type, depending on the liquid crystal mesophase, and considered several applications for the detection of biomolecules, point-of-care diagnostics and environmental monitoring. We also discuss interactions between polarized light and target pathogens dispersed in biological fluids, which result in the change of the polarization state. An array of the Stokes parameters can be compared with the pattern, and a proper pathogen can be manifested. We suggest that a combination of a micropolarizer array and a complementary metal oxide semiconductor sensor is an optimal setup for the detection of pathogens. Herein, we discuss the working principles of liquid crystal biosensors and their fabrication principles. In addition, relevant theoretical and practical issues related to liquid crystal biosensors are outlined. In general, this review gives an in-depth survey of the research on liquid crystal-based sensors, making it easier for researchers to locate their niche and make contributions to this subject from multiple viewpoints.