Alasdair Taylor's Answer
A website privacy policy is a legal document. One of the key purposes of a privacy policy is to help the website operator to comply with data protection legislation, specifically the disclosure requirements contained in that legislation. Larger businesses use specialist internet and data protection lawyers to prepare these documents and keep them updated.
That said, as legal documents go, privacy policies for most websites are quite straightforward, and there are lots of good templates available. You could expect to pay several hundred pounts for a typical lawyer to prepare a typical policy, and for many startups (especially those whose personal data processing is standard and limited) templates may represent a sensible balancing of cost and risk.