If we claim we have not sinned,
we make him out to be a liar
and his word has no place in our lives.
This verse was aimed at those in the church who were denying the sinfulness of man. We have those types today, and they were around back when this book was written.
Every age seems to have a group who spend their time trying to tear down God's word, and in essence, make God a liar.
People who fall into that have no place with God, and His word has no place in their hearts.