When thieves made off with a $250,000 excavator from a New York construction site in 2008, their undoing was not a sophisticated theft deterrence device or a wireless tracking system. What eventually brought the police to their door was evidence left by the getaway driver, who crashed the massive machine into an overpass on the New York State Thruway.
While this outcome was positive for the excavator owner, construction executives know that equipment recovery is unusual when it comes to jobsite vandalism and theft. In fact, the National Equipment Register reports that as little as 10 percent to 15 percent of stolen equipment is ever recovered.
Experts estimate annual losses from theft and vandalism at construction sites across the nation are between $1 billion and $1.5 billion. Additional indirect costs, such as management time devoted to losses, work disruption, crime reporting documentation and temporary replacement measures, all add to the drain on construction businesses.
How to Fight Back
Remote construction sites, or those left unattended during weekends and off hours, are attractive targets. With subcontracting crews coming and going, it is difficult to predict if someone may offer inside knowledge to potential thieves.
Construction companies can turn to insurers for risk control services and specific ideas on how to reduce losses. Insurers typically focus on four areas of guidance.
- Who is coming and going onsite, and how is the entry and exit of workers controlled? Have workers undergone criminal background checks? Are site-specific identification badges provided to indicate workers belong on the job? Does the schedule detail when certain subcontractors will be onsite so a person who shows up at a different time is noticeable?
- What equipment, tools and materials are kept onsite? Is the inventory consistently updated, with procedures in place for logging items arriving to and departing from the site? Are materials delivered just-in-time so they are not stockpiled in advance, creating a tempting target?
- Where are equipment and tools secured? Is equipment spread throughout the site so it is difficult to track? Is there a process for securing heavy equipment at the end of the day? Are procedures in place for securing keys rather than leaving them in the ignitions? Are materials stored in a lay-down yard? Are there incentives and rewards for supervisors who maintain a theft-free environment? Is equipment returned to the main storage facility when it’s no longer needed on the jobsite?
- How is technology used to add layers of protection? Do hardened locks and other obvious anti-theft devices act as deterrents? Does the site have an alarm system? Is wireless tracking or other sophisticated technology used to guard equipment? Has local law enforcement been alerted about the hours of operation and security measures in place?
In addition to helping contractors identify best practices for site security, insurers can help select various security systems. They also can alert contractors to local trends in crime, such as gang activities, emerging scams and new problem areas. An insurer’s specialty investigations and claims units can keep a business functioning after a theft. Down time is the enemy of all contractors, and these added benefits help a company get back to work quickly.
Construction executives should seek insurers that invest in risk control knowledge and personnel, and demonstrate an interest in providing services beyond the payment of claims. (Examples include seminars on theft issues, information on management best practices and advice on the safe use of equipment.)
Combating crime is of mutual interest to insurers and construction companies. In the end, construction executives have a choice: They can pay their premium and connect with their insurer only when they have a claim, or they can form a long-term relationship with a knowledgeable agent who will support them in the fight against crime.