How to minimize construction site theft

by John Wallen, HUB International

Most thieves are looking for an easy target – and a dark, empty construction site full of expensive equipment and materials may be the easiest target out there.

It’s so tempting, in fact, that the National Equipment Register reports annual losses between $300 million and $1 billion.

The worst part is the theft costs builders and contractors dearly. It’s not just about purchasing a new piece of equipment, although that is certainly costly. Beyond that, it’s the cost of renting another piece first because it’s available sooner, and then buying one later on. It’s the cost of lost time, leading to project delays down the road. It’s the cost of additional man-hours of work or increased insurance premiums. And it’s the cost to your reputation, when the work isn’t done according to plan.

Equipment theft includes anything that will fit in a pickup truck, from supplies like copper wiring and metal roof tiles or expensive electronics such as 3-D measurement systems or power tools. Some burglars have even been able to steal large equipment that typically comes with a six-figure price tag.

And in the world of the pandemic, with materials shortages and rising costs of supplies, it’s become an even bigger issue. Roughly 90% of builders are reporting shortages of appliances, windows and doors for new homes. And lumber thefts are on the rise, with thousands of dollars of wood going missing from Colorado to Florida.

Very little of the stolen equipment is returned, so it’s best to take steps to protect your equipment before it gets stolen – by deterring thieves from entering your site. Use these simple tips to protect your equipment from thieves.

• Place your mark. Label each piece of equipment, including attachments and removable parts, with the company name. It’s a good idea to use special labeling equipment, such as welders or etching tools, to make the label hard to remove. Consider microdot identification technology, a method of labeling that involves etching a series of tiny invisible dots onto a piece of equipment that show up under special lighting or magnification, for pieces that are especially valuable. Consider keeping a record of what’s on site to better track your assets and make it easier to recover missing pieces.
• Use layers of security. Anyone looking for an easy target can be easily deterred. Lock any doors and fence in the whole site, limiting the number of access points. Consider the lighting, especially at night, and add additional lighting in areas that need it. Hang signs that warn of on-site surveillance and trespassing penalties. Depending on the location, hiring guards may seem expensive but can be a cost-effective security measure.
• Take advantage of technology. Many builders and contractors are put off by the steep price tag associated with many technological solutions. But motion-activated camera systems that can monitor all angles and points of entry can rely on a cell phone or Wi-Fi. And automated notifications from the motion sensors can provide alerts in real time without having a guard on-site 24/7. On larger sites, “Internet of Things” (IoT) solutions can combine lighting, monitors and alarms to protect equipment – and can also identify other risks, such as fire and flooding. It takes only a few strategically placed sensors to make a real impact on your risk. Finally, a small, hidden GPS tracker can be installed on small items that can be easily stolen. Just make sure the tracker won’t be easily located and disabled.
• Secure appropriate storage. Make sure your site has an appropriate storage facility for all valuable equipment. Alternatively, identify an appropriate, safe location and require employees to return keys and smaller, portable equipment to that spot, rather than allowing them to store everything on site for convenience. Also, avoid using a “universal” key, which can leave the whole site at risk if a theft occurs.
• Lock it up. Pay special attention to anything that can easily fit in a pickup truck. It’s a good idea to lock these items inside the building envelope, if possible, or another secured box on-site. Anything with wheels should be hidden to make it less visible. Hydraulic locks and hidden disconnects are effective for some of the most commonly stolen equipment, including skid-steer loaders and tractors.

Although there will always be a market for equipment theft, your site doesn’t have to be the target. Take proactive steps to beat the burglars by protecting your site – and your equipment. Your employees can help. Encourage them to follow proper procedures and secure equipment at the end of each working day in order to discourage the burglars from taking what isn’t theirs to take.

Secure adequate and appropriate coverage to protect your business

Even after exhaustive steps have been taken to prevent equipment theft, you may still lose equipment to crafty thieves.  The trick is secure appropriate coverage in order to avoid costly, claim-related issues and work interruptions. Unfortunately, few contractors have appropriate insurance to protect their full interest. For example, most construction businesses don’t have enough coverage to replace their equipment, either because the cost of new equipment exceeds the coverage or because ancillary equipment isn’t excluded from the policy. Even if they do have sufficient coverage, they may not have a rental reimbursement or a loss of use coverage to mitigate the job delays that come from missing equipment. There are a number of additional coverage considerations or potential gaps to consider, depending on your business.

The best course of action is to consult your broker.

ABOUT THE AUTHOR —

John Wallen is Vice President and Wisconsin Construction Practice Leader for global insurance brokerage Hub International. He has more than 30 years of experience providing risk management consulting, effective insurance solutions and innovative risk and cost reduction strategies for the construction industry.  John is active in multiple construction industry trade associations including ABC.