Which example illustrates the concept of loss control?

The example of installing fire alarms to prevent fire damage effectively illustrates the concept of loss control. Loss control refers to measures taken to reduce the possibility or impact of losses, whether from accidents, natural disasters, or other risks. By installing fire alarms, individuals or organizations actively work to identify, monitor, and mitigate the risk of fire. This proactive approach helps in detecting potential fire hazards early, allowing for swift action that can prevent or significantly minimize damage.

In contrast, the other choices lack a proactive risk management strategy. For instance, choosing not to insure assets does not mitigate risk but rather exposes one to greater potential loss. Similarly, investing in high-risk stocks does not address loss control but rather increases the possibility of financial losses. Lastly, living in a flood-prone area without taking precautions overlooks the importance of adopting preventative measures to manage the inherent risks of such an environment. Thus, the installation of fire alarms stands out as a clear example of loss control in action.