A trucking firm carries a large self-insured retention because minor cargo scuffs happen weekly and each one costs very little. This choice is best described as:
Explanation
Retention means funding losses internally, and it fits exposures that are frequent but small, because such losses are predictable and cheap to absorb while insuring them would cost more in expense loading than the losses themselves. Transfer through insurance is reserved for the opposite profile, low frequency and high severity. Avoidance would mean giving up the hauling operation altogether.
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