Which type of loss likely involves risks controlled by the insured's actions?

The correct answer is that controllable losses involve risks that can be managed or mitigated through the insured's actions. This type of loss is typically influenced by the behavior, practices, and precautions taken by the insured, including risk management techniques such as safety measures, proper maintenance, and operational protocols. For example, a business that implements strict safety standards can reduce the likelihood of accidents, thereby controlling related losses.

In contrast, catastrophic losses are generally beyond the control of the insured and can result from natural disasters or large-scale events, where no amount of precaution can prevent the occurrence of the loss. Nonaccidental losses refer to damages that are not caused by unforeseen incidents, which may not be effectively controlled by the insured. Direct losses are those that result immediately from an incident, but they do not necessarily imply control by the insured, as they can occur from accidents and other unforeseen circumstances.