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:

a.reduction, which cuts the severity of any one loss when it happens
b.avoidance, which drops the exposure out of the business entirely
c.retention, which suits high-frequency, low-severity losses
d.transfer, which is the right answer for small and frequent losses

Explicación

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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