Legal risk is the likelihood of financial or reputational loss resulting from a lack of knowledge (or misunderstanding) of how the law applies to your business, or operating with a reckless indifference to the law and how it applies.
What are the 3 types of risk in business?
Business risk usually occurs in one of four ways: strategic risk, compliance risk, operational risk, and reputational risk.
What is the meaning of risk in law?
Definition. Legal Risk is the risk of losses arising from an unintentional or negligent failure to meet a professional (legal) obligation to specific clients (including fiduciary and suitability requirements), or from the nature or design of a product.
Is legal risk a regulatory risk?
Types. Regulatory Risks turning into legal risks: These are the risks that arise out of regulations and laws that govern a business organization or the market in which it operates. Every country and the government lays down certain laws and regulations for the proper operations of the businesses.