Theft is on the Rise: Is your construction site secure?

This post is part of a series sponsored by IAT Insurance Group.

Here are two true claims stories:

In Dallas, a 2018 Lincoln Ranger Welder and tools in a 20-foot container were stolen from an elementary school jobsite. Since the welder was not trailered, the thieves had to use equipment to lift the device, which weighs more than 500 pounds. The welder and tools were never recovered.

In Miami, thieves were caught on camera breaking into the laydown area of a construction site. They broke down the gate, entered the yard with a truck and maneuvered around a cinder block wall to steal two 2021 Altas Copco compressors. The police investigated but no one was arrested. One compressor was later recovered but never claimed.

Equipment and material theft on construction sites like this is on the rise. In fact, losses are estimated to cost as much as $1 billion annually. During times of economic downturn and instability, theft is likely going to increase. It has never been more important to take steps to reduce the risk of theft on your sites.

Having strategies in place can help minimize the risk of theft on construction sites. Here are 8 tips to reduce the risk of construction site theft:

Conducting background checks during the hiring process can help combat theft on your construction site. Background checks not only verify the qualifications and past work history of potential employees but detect any criminal activity as well. This includes:

• Contacting previous employers and educational institutions to verify information provided by the applicant.
• Running a thorough criminal records check through a reputable third-party provider before making a hiring decision.

Vetting subcontractors is just as important as hiring employees. This includes conducting background checks, verifying references and ensuring they have the experience and qualifications for the job.

Once hired, make sure they understand security policies and procedures. Discuss access restrictions on-site, such as no-go zones.

Monitor subcontractors by using a sign-in sheet or electronic access control system. Knowing who is on the jobsite helps prevent unauthorized personnel from entering the premises without permission.

Most important, draw up contracts with your subcontractors outlining the specific requirements of each project and what happens if a security breach occurs. Contracts should clearly state who is responsible for securing tools and materials each day and explain what kind of insurance coverage is provided by the contractor in case of theft or damage to equipment.

Employee training is a crucial part of protecting construction sites from theft.

Train employees how to identify suspicious activity around the worksite. This includes noting any people or vehicles that seem out of place, or any signs that someone has tampered with locks or fences.

Train your staff on the proper security measures to follow at the end of each day. This includes ensuring all doors and windows are properly secured and locking tools and materials in a secure area such as a tool shed or storage container.

Remind your staff to always keep valuables with them when leaving the worksite such as cell phones, wallets and keys.

Dark construction sites could attract criminals; adding lighting around your worksite can help reduce theft. Installing bright lights along pathways, entrances, exits and storage areas will make it harder for criminals to remain undetected.

Fencing protects against theft and vandalism and helps provide a secure environment for workers on construction sites, especially those in high-crime areas or ones that are unoccupied for extended periods of time.

Common types of fences or barriers are available; this includes:

• Chain link fencing
• Heavy-duty steel panels or mesh fences
• Concrete barriers

Selecting the right barriers will depend on your needs.

Adhere to local building laws when constructing fences around construction sites, since they may require certain standards be met in order for them to remain valid insurance coverage options.

Regularly inspect and repair any temporary fencing for damage or weak spots that could allow entry by unauthorized persons.

Install entry and exit gates that can be locked when the premises are not in use also is recommended.

It’s not uncommon for those in the construction industry to leave equipment keys in tractors and equipment on site. Unfortunately, this situation leaves contractors vulnerable to theft.

Consider the following:

• Designating individuals to secure and issue keys.
• Keeping records of who has taken out each key at any given time. This provides if any equipment goes missing or an unauthorized person uses a key.
• Securing keys in a lockbox, safe, or filing cabinet.
• Investing in electronic locks or digital key tracking systems, which allow you to track a key’s location at all times.

The other challenge is that many equipment companies use a universal key for all equipment, making stealing equipment off another job site even easier. In high-theft areas, contractors may find it worthwhile to invest in re-keying equipment or adding an additional locking mechanism to be accessed before using the equipment.

Investing in security systems, such as CCTV cameras to monitor the site and installing motion-activated lighting, can help deter potential thieves from stealing or damaging equipment and materials left on-site.

In addition to security systems, it may be necessary to hire security guards to monitor the jobsite and report any suspicious behavior. Security guards are useful at night and weekends when construction activity is minimal. For particularly high crime areas security guards may be beneficial 24/7.

Installing GPS tracking devices on equipment can help locate — and hopefully recover — stolen items.

The right insurance can help cover losses from theft and damage caused by malicious acts, such as vandalism.

When selecting the right policy, consider the following factors:

• Construction work being conducted
• Type of coverage
• Deductibles
• If the policy covers replacement costs or just repairs.

Discuss these details with your broker prior to ensure you have the policy that best meets your needs.

By harnessing these best practices, you are taking the necessary precautions to protect your assets and reduce the chance of theft.

Have a question on how to mitigate risk? Email losscontroldirect@iatinsurance.com for a chance to see your question answered in a future blog.

By Katie Bloomquist