If you are getting such error, ““Your web server is configured incorrectly. As a result, configuration files with sensitive information are accessible from the outside. Please contact your hosting provider.” , then here is the fix for it.
Just CHMOD app/etc/local.xml to 550 and you are done.
Clear your cache after that.
Article source: http://www.learnmagento.org/magento-tutorials/magento-error-your-web-server-is-configured-incorrectly/