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In this tutorial, Katie O'Brien addresses the essential legal documents to include on your website for online business compliance. She emphasizes the importance of having a privacy policy, which safeguards website visitors by informing them about the data being collected, its purpose, storage, and protection. Additionally, she highlights the significance of a terms and conditions agreement that outlines the rules and guidelines for using the website, ultimately protecting both the business and its visitors. The video aims to simplify the process of setting up these legal documents for a smoother online business operation.