Sean Clements
A trio of Arizona thieves was arrested last year for a crime sequence in Mesa and Tempe that fell into the “insult to injury” category: stealing a Caterpillar front-end loader from a construction site, then using it to knock down a credit union’s walls so they could make off with its ATM. The loader was left at the scene and the three were arrested before they could open the ATM.
Construction site theft is a persistent problem, and thieves may go to extraordinary lengths to carry out their crimes. According to estimates, theft costs the industry as much as $1 billion annually. The pain is compounded by the fact that less than 25% of what’s stolen is likely to be recouped.
As inflation and supply shortages drive up the prices of construction materials, the rising stakes have emboldened criminals.
One Michigan thief made off with a $165,000 Caterpillar loader from a site he had driven to using other equipment he had previously stolen from a different site. And in Florida, which along with California and Texas are the most theft-prone states, a Cape Coral contractor was so plagued by thieves that he spray-painted on the structure he was building, “NO TRESPASSING—I WILL PROSECUTE.”
Construction site thefts are typically covered by builders’ risk insurance coverage, although it’s important to double-check with your broker for specific exclusions. Employee theft is unlikely to be covered. And contractors typically cover smaller losses out of pocket to protect their risk profile.
A wise response by the industry would be to beef up construction site security. Just replacing stolen equipment or materials is a risk in that it’s likely to extend project timelines and escalate costs. Although a documented security program is not necessarily a path to lower insurance rates or higher limits, such a program does create a positive risk management story for an insurance underwriter.
Security measures can range from the basic and inexpensive to technology-based and sophisticated. Combined, they will serve construction firms well for more than just deterring thievery.
The security strategy should be built around multiple lines of defense so that criminals have to really work at it to break through. That starts with locked and climb-resistant fencing that’s posted with surveillance warnings and notice of penalties to trespassers. Access points should be limited. On-site guards are a real deterrent to crime at sites in high-risk areas. Good, abundant lighting at night is also critical, especially when supplemented by cameras and alarms.
Tech solutions are an investment worth making, plus, insurers view them favorably. Internet-enabled tags equipped with sensors can monitor equipment in real time. Other internet of things-inspired solutions track indoor, outdoor and equipment motion as well as fire, water and humidity levels. Tracking software with GPS is another option, but not the only solution as these devices are fairly easily located and disabled by thieves. Equipment that’s portable and drivable needs extra attention. Generators, welders and smaller equipment should be stored out of sight or positioned to block easy transport. The most commonly stolen equipment includes loaders and tractors, so consider solutions such as hydraulic locks and options for hidden disconnects.
A smart anti-theft strategy should also include a documented, up-to-date inventory of tools and equipment. One reason why recovery is so low is because larger items like heavy equipment don’t usually have titles or registration. Marking everything (and noting it in the inventory) from hand tools and their attachments to forklifts should become standard procedure. Applying a unique ownership mark with a welder or etching tools helps identify items. Microdot identity technology systems are another option.
Finally, adequate, secured storage is a must. Gang boxes should have enclosed and recessed locking points and locks that can’t be drilled open. Wheels on gang boxes should be removed, and boxes should be locked down once they’ve been set on site. Workers who bring tools home shouldn’t leave them in vehicles unless they are locked and the alarm system is on.
An investment in site security is worth making, if for no other reason than the favor with which insurers view a security plan backed by measures like these.
