Over half of small business decision makers find dealing with legal documentation stressful

  • Nearly one in five (18 per cent) say they have regularly made mistakes when drafting or reviewing legal documentation
  • More than a quarter (28 per cent) feel underconfident when it comes to assessing or writing legal documents


More than half of small business decision makers (56 per cent) find dealing with legal documentation related to their organisation stressful, according to new research from Direct Line business insurance.1

This stress is having a major psychological impact, as a quarter of decision makers (25 per cent) said they were unable to concentrate due to anxiety over legal documentation and 24 per cent said they had suffered sleepless nights. While a further 23 per cent reported developing mental health issues. Nearly one in five (19 per cent) said the stress became so overwhelming they considered closing or taking a step back from their business.

The research also revealed that small business decision makers have regularly made mistakes when reviewing or drafting legal documentation. Nearly one in five (18 per cent) reported they have made frequent errors, which may have put their organisation at serious risk.

Stress and inaccuracies appear to result from a widespread lack of confidence, as 28 per cent of small business decision makers say they don’t feel confident when it comes to drafting or reviewing legal documentation related to their business.

This is partly because many types of legal documentation can be confusing:

Most confusing types of legal documentation – Direct Line business insurance, 2022: 

Type of legal document

Percentage of respondents who reported finding it confusing

Contracts for selling and buying services to and from other businesses

14 per cent

Documentation for contractors

13 per cent

Flexible working policies

12 per cent

Copyright and trademark licences

11 per cent

Data protection policies

10 per cent

Employee contracts

9 per cent

Covid-19 risk assessment templates

8 per cent

SME decision makers may be struggling to understand certain types of legal documents because they are not researching the broader regulatory landscape. Just 19 per cent regard themselves as very aware of the evolving regulatory landscape and how this affects their business.

Alison Traboulsi, Product Manager at Direct Line business insurance, commented: “56 per cent of small business decision makers often struggle with reviewing and drafting legal documentation. They find the process stressful and confusing, which is leading to errors that could be exposing their organisation to legal risk.

“Prevention is better than cure, but many SMEs do not realise it is possible to get advice on legal issues, big or small, from other business providers, including their insurance company. This can help them improve their knowledge of the most common legal issues, reducing their exposure to risk.

“Direct Line’s Legal Essentials service offers 24/7 support and advice to small businesses via a dedicated helpline, as well as access to over 1,000 guides, videos and tutorials curated by legal experts. They can also benefit from a wide selection of letter and contract templates, as well as regular online updates in line with the latest regulatory changes.”

For more information about Direct Line business insurance’s Legal Essentials service, please visit our dedicated webpage: https://www.directlineforbusiness.co.uk/small-business-insurance/legal-essentials



1)    Opinium survey of 2,000 UK adults conducted 11-15th March 2022, 155 of whom were small business senior decision makers.

For further information please contact:                

Direct Line Group  

Unni Henry  

Marketing Practitioner   

Email: [email protected]

About Direct Line business insurance

Launched in 2007 Direct Line business insurance now has over half a million customer policies, providing a flexible range of insurance products for the landlord, van and small business sectors.  

Direct Line business insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.  

Direct Line business insurance and U K Insurance limited are both part of Direct Line Insurance Group plc. 

Customers can find out more about Direct Line business insurance products or get a quote by calling 0345 301 4827 or visiting https://www.directlineforbusiness.co.uk