Loss prevention is best described as:

• A. Transferring risk to an insurer.
• B. Taking steps to reduce the frequency of a potential loss.
• C. Eliminating all risk with perfect controls.
• D. Reducing the severity of a potential loss.

Answer: (B)

Loss prevention means lowering the chance that a loss will occur. It involves proactive steps like safety training, hazard identification, regular maintenance, and security measures to stop incidents before they happen. That makes it the best description as taking steps to reduce the frequency of a potential loss. Transferring risk to an insurer shifts the financial burden rather than preventing the event. Striving for perfect controls to eliminate all risk isn’t realistic in practice. Reducing severity focuses on limiting the impact if a loss does occur, not on preventing the loss itself.