If canceled, what basis must the company choose to retain the risk of loss internally?

In the context of retaining the risk of loss internally, the claims-made basis is critical because it defines the conditions under which claims are covered by insurance. This basis requires that the insurance policy must be in force not only when the claim is made but also when the event giving rise to the claim occurred. Thus, if a company decides to retain risk internally, it must utilize a claims-made basis to ensure that it addresses any future claims effectively, as the coverage is tied to the timing of both the claim and the event.

Adopting a claims-made basis provides clarity about the timeframe in which incidents must occur to qualify for coverage, which is essential for companies actively managing their risk retention strategies. Understanding and implementing this approach enables organizations to accurately assess and prepare for potential liabilities that may emerge over time.

The other options do not pertain to the specific requirements of maintaining internal risk management regarding claims and their timing, making the claims-made basis the most suitable choice in this scenario.