Which action exemplifies loss prevention?

Installing a security system to minimize theft is a clear example of loss prevention because it actively reduces the likelihood of theft occurring. Loss prevention strategies aim to mitigate risks before they result in financial losses or damage. By taking proactive measures such as implementing security systems, businesses and individuals can protect their assets and minimize potential future liabilities.

In contrast, owning property in a high-crime area increases exposure to risks, not reducing them. Not purchasing insurance does not prevent loss; rather, it leaves one without financial protection in the event of a loss. Accepting high-risk activities also escalates the likelihood of incurring losses, contrary to the principles of loss prevention. Therefore, the installation of a security system effectively demonstrates the concept of taking steps to prevent a loss before it happens.