The principle of 'unexpected losses' entails which of the following?

The principle of 'unexpected losses' refers to losses that cannot be anticipated or controlled. This concept is critical in insurance because it underscores the importance of risk management and understanding that not all potential losses can be planned for or mitigated. Unexpected losses often arise from unforeseen events, such as natural disasters, accidents, or sudden market changes, which cannot be predicted with certainty.

In the context of insurance, recognizing the nature of unexpected losses is essential for determining how to protect against these risks effectively. Insurers need to prepare for such occurrences by offering coverage that addresses the financial impact of these unpredictable events. This principle also emphasizes the importance of having contingency plans in place, as the inability to foresee these losses can result in significant consequences for individuals and businesses.

The other choices refer to losses that can be anticipated, managed, or are of a minor nature, which do not align with the definition of unexpected losses.