Diffusion-weighted images of the liver exhibit signal dropout from cardiac and respiratory motion, particularly in the left lobe. These artifacts cause bias and variance in derived parameters that quantify intra-voxel incoherent motion (IVIM). Many models of diffusion have been proposed, but few separate attenuation from diffusion or perfusion from that of bulk motion. The error model proposed here (Beta*LogNormal) is intended to accomplish that separation by modeling stochastic attenuation from bulk motion as multiplication by a Beta-distributed random variate. Maximum likelihood estimation with this error model can be used to derive IVIM parameters separate from signal dropout, and does not require a priori specification of parameters to do so. Liver IVIM parameters were derived for six healthy subjects under this error model and compared with least-squares estimates. Least-squares estimates exhibited bias due to cardiac and respiratory gating and due to location within the liver. Bias from these factors was significantly reduced under the Beta*LogNormal model, as was within-organ parameter variance. Similar effects were appreciable in diffusivity maps in two patients with focal liver lesions. These results suggest that, relative to least-squares estimation, the Beta*LogNormal model accomplishes the intended reduction of bias and variance from bulk motion in liver diffusion imaging.