What Does Small Loss Principle Mean?

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What does Small Loss Principle mean? Read on to discover the definition & meaning of the term Small Loss Principle - to help you better understand the language used in insurance policies.

Small Loss Principle

Small Loss Principle

Small loss principle is an insurance principle where the insured keeps low-severity risks that are not disastrous. This principle can be absorbed without causing any major effects on the monetary structure of an individual or business. The premium paid by the insured reflects their projected losses including the expenses of the company and contingencies.

We hope the you have a better understanding of the meaning of Small Loss Principle.

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