Theft on the Job Site: Protecting Your Equipment and Materials

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Protect your construction site from theft! In this episode, we discuss the rising issue of job site theft and how it impacts your business. Learn practical tips to safeguard your equipment and materials, especially during holidays. Don’t let theft eat into your profits – listen now and secure your assets! 

Topics we cover on this episode include: 

  • 00:28 – Theft in Construction Industry
  • 01:06 – Holidays: Prime Time for Theft
  • 02:08 – Organized Crime Involvement
  • 03:06 – Statistics on Equipment Theft
  • 04:25 – Protecting Equipment During Holidays
  • 05:43 – Insurance for Equipment
  • 07:05 – Security Measures
  • 07:50 – Technology Against Theft
  • 09:03 – Importance of Police Reports
  • 10:24 – Insuring Equipment for Replacement Cost
  • 11:40 – Material Theft and Vandalism
  • 13:10 – Insurance for Materials


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Wade Carpenter, CPA, CGMA |
Stephen Brown, Bonding Expert |


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[00:00:00] Wade Carpenter: Have you had issues with theft on your job sites: missing tools, materials disappearing, rising costs? It’s a serious problem in the construction industry.

Come on in, let’s talk about it.

This is the Contractor Success Forum. I’m Wade Carpenter and Carpenter & Company CPAs. With me, as always, my co host Stephen Brown with McDaniel Whitley, Bonding Insurance.

Stephen, are you seeing contractors struggling with job theft?

[00:00:22] Stephen Brown: Oh, yes. It’s always been a problem, but it’s a big problem now. Reportedly a billion dollars worth of, equipment and materials are stolen off job sites in the United States alone, per year. And the whole reason that an idea for this podcast came up, it’s just, looking at the statistics over Labor Day weekend. We have 4th of July coming up, and these extended periods of non productivity are perfect time for thieves to be hitting your job sites. Stealing your equipment, stealing your material.

For one thing, the job site is going to be shut down for the holiday, and also a lot of law enforcement will be busy doing other things. It’s prime time for theft. These national statistics are just mind boggling to me. And here in my part of the world, we see certain, type of equipment trends going on.

This equipment is stolen and it’s trucked down to different places where it’s s smuggled out of the country and sold on the black market. Heavy construction equipment is something that’s, the theft is heavily influenced by organized crime. It’s big business.

And they’re looking for the big equipment. They’re looking for the expensive equipment. So you think you’re safe. What can you do about it? I guess that’s the purpose of the podcast.

[00:01:40] Wade Carpenter: I know you were sharing with me, especially here in the South, Southeast, it’s particularly bad right now, and it’s a little scary to hear some of that. I know I’ve had several of my contractors having to deal with that. It’s a constant problem, but, I know you had some statistics to share with us from Labor Day weekend too.

[00:01:59] Stephen Brown: Sure. Texas, Georgia, Florida, North Carolina, were hit hardest out of all the states. And then number five was California just during Labor Day weekend. The dealerships themselves are being hit hard, and in a work site, and then also at your office where you’re storing equipment.

The most equipment as far as sheer number of pieces of equipment or skid steers. And, the larger equipment seems to be done in a theft ring where a certain targeted area will be hit hard. And it’s a very organized attack. That equipment will be taken. The bigger equipment will be taken at numerous sites.

Why you should be more vigilant about protecting your equipment around holidays

[00:02:37] Stephen Brown: As we go into the 4th of July weekend, week really, this year, there’s more and more things you need to do to protect your equipment. And so there’s a lot of common sense things that you could do. When someone wants to steal a big piece of equipment, fences don’t really matter. They just roll over them.

The small thefts can definitely be done by fencing in the job site. Electric fencing on the job site. I had somebody had to do that once. Dog patrol on the job site at night. It’s scary to me as an insurance agent because if your dog bites someone, you get sued for it.

One of my customers had a black German shepherd named Nitro that was terrifying. And anyway, I suggest we change Nitro’s name to Daisy and just pretend it was a family pet. But anyway. This small theft, something you can get in and get out quickly. Everything I hear, the burglars, they’re just looking to get in and out quickly.

Batteries, copper especially, just tearing out wiring in a piece of equipment. Those are outrageously high insurance related vandalism claims. And it happens. You can’t bring all your equipment back to a secure place every night. You have to leave it out on jobs. And sometimes that’s in the middle of nowhere. And sometimes that equipment’s targeted.

Anything you can do to hide or secure your equipment. Anything that you can do for added security as far as getting the equipment started. Of course, keeping the access to that equipment separate.

And also monitoring who’s using the equipment. A lot of general contractors will let their subcontractors use their equipment for some after hour work, and I’ve seen a lot of claims that way.

Also, insurance. You want to insure the equipment and people want to know what that costs. Equipment insurance i s a rate based on per 100 of value.

And there’s two ways to insure your equipment. There’s to schedule your equipment on a policy. That’s equipment you own. And then there’s rented and leased equipment coverage. And that’s coverage for equipment you rent or lease.

And the insurance rate is based on the highest dollar value of a piece of equipment you may rent, and how much you spend a year on renting equipment.

It’s substantially less than if you bought the insurance from an equipment dealer. But you want to make sure 100 percent of that equipment is covered, less the deductible if it’s stolen.

[00:05:08] Wade Carpenter: What can we do about it? I know you mentioned having dogs, and I had some people that used to hire security guards, the cost of labor, that’s pretty expensive too.

And I actually have a client that provides security trailers and stuff like that, where they are monitoring these things remotely. And it’s amazing what the technology can do. They’ve got cameras all across this the job site and a lot of them are infrared cameras, so if they’re coming up in the middle of the night, they can see somebody’s doing something. They don’t have somebody on site, but a lot of times they can have the police rolling, and they told me some dramatic catches where they’ve caught some thieves stealing things, things like that, so just want to throw that out there.

[00:05:50] Stephen Brown: Sure, that, making sure your job site is lit up at night. Proper lighting is huge.

How technology can help curb theft on the job site

[00:05:57] Stephen Brown: And the video surveillance, a lot of people say what’s the use of having video surveillance if the police are not going to catch the folks that I have? For one thing, you can see where and how they’re breaking in to your job site or your main place of business.

[00:06:12] Wade Carpenter: If you find fuels being stolen or something like that. A few years ago, the same people that did the cameras and the security trailers, they caught somebody here in Atlanta who actually made news where, these people were going in this site and stealing mercury switches out of like thermostats or something like that. And apparently the FBI got involved because they thought these mercury switches were being used in bombs or something like that. But it was a huge case and, you know, these remote secure security trailers, there are people monitoring it remotely so it doesn’t take as much but it’s amazing the technology can pay attention to it without a human being even looking at it.

[00:06:50] Stephen Brown: Absolutely.

[00:06:51] Wade Carpenter: That can be a cost effective way of doing that as well.

[00:06:55] Stephen Brown: It sure is. It’s cheaper than ever to set up your own security on site. Of course, having a 24 7 security guard is one of the best ways.

But one of the things that it’s so important to do is that you’ve got friends on the police force. As soon as you have a theft, a lot of contractors just don’t report it. It’s I don’t have time. to mess with it. But if you report it, there’s a police report and there’s some information that will help the police decide whether there’s a theft ring operating in your area and what to do about it. And also, if they’re friends of yours, they’re going to let you know what’s going on around town that you need to be aware of.

But just talking about insurance costs, Wade, for thefts of material and equipment on a job site, there’s also the cost of having to reorder the equipment, re rent or purchase another piece of equipment that’s stolen, and then the downtime while you have to deal with that. And right now, in today’s environment, where material is hard to get a hold of, material theft is on the rise. There’s tags and trackers you can hide in your material. A lot of these step frames use GPS blockers that block the GPS tracking signal on your equipment, but there’s certain equipment that, for example, one of my customers job sites, the specific roofing that was called for was so expensive and so hard to get that they literally camouflaged it to look like something else.

They didn’t want anyone to see what they were storing on the job site. Now, certain customers of mine like demolition contractors, they will bury their copper underground, and hide it. One situation, a client bought a property that used to be a demolition contractor and found a map. It was like a treasure map of copper that was buried all over their 15 acre site, and they were really excited. They thought it was a good treasure map, but they dug up the whole place just like that movie Holes, and they had already taken all the copper out of there.

But burying, protecting, being aware. I just wanted our listeners to think about these things. Talk to your insurance agent about your concerns. Plan to protect your job site, and you should be in pretty good shape. That’s what insurance is for.

Do I need a police report to file an insurance claim for theft on the job site?

[00:09:16] Wade Carpenter: Right. So let me ask you from an insurance standpoint, you mentioned that, whether people don’t get a police report, but Is the insurance company going to require a police report or some kind of documentation that a contractor should be aware of?

[00:09:30] Stephen Brown: Yes, to file a claim, you have to have a police report. If there’s miscellaneous tools and equipment that you have covered for example, a box on the back of your pickup truck, there needs to be proof of forced entry into that for it to consider being stolen. You can’t just leave it unlocked and things disappear. That makes common sense. But yes, you have to get a police report.

Insure your equipment for the cost to replace it

[00:09:52] Stephen Brown: But I can tell you this, you want to insure your used equipment for the cost of you to replace that specific piece of equipment. So don’t think that this equipment is older and it’s not worth anything. These days, the older equipment is just as valuable as the newer equipment.

People like it because they can work on it themselves, and they also like the older equipment because it’s dependable. In their minds, it’s dependable. If you have a 2001 bulldozer, and you’ve put 100, 000 worth of rebuilding during the off season, which everyone does, don’t forget to let your agent know to increase your coverage.

It’s your responsibility to decide how much to put on the equipment. And you might say like auto insurance, they’re just going to depreciate it. No, that’s not true. You’re insuring it for replacement costs. So it’s your job and your agent’s job to to come up with a fair value that you want the insurance company to pay you.

And you can almost always accomplish that if you’re just being fair about it. So I can just tell you this, most of my contractors, even though I sit on them and bug them about it, don’t like reviewing their equipment schedule, list of values. They just don’t. And also keeping track of all that equipment, keeping track of all your materials.

If you’re not doing a good job of that, then you’re just ripe for things to be stolen. You can say my employees would never do anything like that. They have friends that would. I’m just saying, just be aware of that.

[00:11:28] Wade Carpenter: Coming back to the insurance side of it, why would people not turn it in? Are they afraid that their insurance rates are going to go up too much or–?

[00:11:36] Stephen Brown: There’s a little bit of that. It’s the headache factor of dealing with it. I just want to move on from this. It’s not that much. I’ll just eat the loss. But a good insurance agent will help you. The claim process should not be difficult for you. It’s your agent’s job to handle that.

The police report should not be difficult for you, but a lot of times you may not have the serial number. You might not have just the basic information about the equipment. And so I always tell my customers, when you buy a new piece of equipment, just take a picture of the purchase receipt, even with your cell phone, and text it to me so I can add it.

Then at least I’ve got the serial number, and model number, and the exact cost you paid for it new, or used.

[00:12:21] Wade Carpenter: Good advice.

How to avoid theft of materials and vandalism

[00:12:22] Wade Carpenter: Any other thoughts on the material side? Because I know sometimes the material disappears more than the equipment.

[00:12:29] Stephen Brown: It sure does. And we haven’t even talked about vandalism on a job site, things that attract vandals.

But the material on a job site is definitely something. You can say if I have a big, lumber package, people aren’t going to break in that to steal individual pieces. But they do all the time.

And so these are small thefts that just eat into your profit. Any material that’s involving any kind of metal is targeted. Some of these organized crime outfits, stealing equipment may have inside people at the dealership that’s letting them know when a big shipment is going out.

Understanding that it’s at risk as soon as it gets into your hands and making sure it’s insured. You can insure these materials under a policy that’s called an installation floater. And it’s something your agent should put on all of your projects. There’s a blanket amount of say, a random $100,000 worth of miscellaneous materials on a job site that you can schedule. It’s pretty inexpensive.

You can bump that up if routinely you’re having a lot more than that to insure at each job site. A lot of times I see myself having to insure huge chunks of materials, equipment that’s designated to go into a construction project, HVAC equipment, security equipment. The contractor’s prepaid for that, because they’ve gotten a deal on it, they want the owner to reimburse them until it’s installed.

And they won’t do it until they verify that it’s on site, and that it’s secure, and that you’ve paid for it, and that it’s insured.

[00:14:07] Wade Carpenter: I’ve seen that many times too. I know about 10 years ago, the office building where we are has like a strip of air conditioners and they just went between the buildings and just cut all the copper out of the A/C unit, out of 10 units in one weekend, and nobody knew they were there. They just pulled up and grabbed all the copper and they were gone.

[00:14:26] Stephen Brown: Oh, sure. A lot of people in the crime area, literally will build and weld a cage, around their AC unit at their offices. I have a customer that made a genius entry lock to get in, into their cage around their AC system, just simply because it had happened so much and they were so frustrated with it.

Yeah. Air conditioners, air conditioning compressors, anything with copper in it. So you might say I’m just thinking of the crackheads that are stealing stuff from my job site. Then you’ve got the folks just generally, bored, that might vandalize your job site because they have nothing else to do. And that happens. And then you’ve got your big theft rings.

So you have to think about what your exposure is and what you want to do about it. Best advice I have is always to insure it and to have friends on the police force. That’s easy. Support your, law enforcement in absolutely every way you can and get to know them personally. And then you’ll find that the stress of filing these claims and getting criminals caught is a lot easier. And if everybody would do this, there’d be a lot less crime right now.

 A billion dollars a year in equipment, material theft alone? That’s something to pay attention to, Wade. And to remember, on 4th of July, Labor Day weekends, it’s prime time for thieves. They’re not going to be patriotic this 4th of July.

[00:15:51] Wade Carpenter: Okay. Good advice. Any other final thoughts on this? I think it’s been a great topic. If people have questions, can they give you a call, and how can they reach you?

[00:16:00] Stephen Brown: Absolutely. Just give me a ring, at my office McDaniel Whitley Insurance and Bonding, 901 340 8085. I’ll be happy to help.

[00:16:10] Wade Carpenter: Great. We all thank you for listening to the Contractor Success Forum. We’d love to hear any questions or even horror stories if you’ve had some theft on your job, we’d love to hear some of that. And ways you may have helped to, thwart theft from happening. Love to hear some more comments and feedback.

Drop them in below and thank you for listening to Contractor Success Forum. Check out more information at the ContractorSuccessForum. com or the Carpenter CPA’s YouTube channel for more information. We’d appreciate it if you’d consider subscribing, liking the podcast, and follow us every week as we post a new episode.

We will look forward to seeing you on the next show.

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