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Theft of contractors’ equipment

Date Posted: February 23rd, 2017

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From Westfield Insurance:  

For contractors, theft is one of the leading causes of equipment losses. Every year, the National Crime Information Center receives between 600 and 1,200 reports of equipment theft, with an estimated average cost of $17,400 per piece stolen.

The loss of equipment stolen from jobsites is estimated at $300 million to $1 billion annually, not including indirect costs such as rental of replacement equipment, project delays and the costs to file reports. Historically, equipment thefts were divided between organized rings and nonprofessional groups. However, that is shifting toward professional theft rings that steal equipment for parts, which are fenced or sold on the internet, sold to unsuspecting contractors, or shipped overseas.

What Thieves Want and Where They Find It

Thieves tend to take equipment that is either in high demand or easy to steal. According the National Equipment Register (NER) of 2013, mowers, riding tractors and garden tractors account for 46 percent of equipment thefts. Skid steers, backhoes, wheel loaders and tractors (utility and agricultural) account for 29 percent of thefts (by number, not dollar amount). Cranes and other large pieces of equipment are more difficult to steal and, as a result, are seldom stolen, while newer pieces of equipment are more frequently taken, as they are worth more. The top five states, accounting for 41 percent of all equipment thefts, are Texas, North Carolina, Florida, California and South Carolina.

Equipment manufactured by John Deere is most likely to be stolen.

The problem

There are many manufacturers of many different kinds of equipment, and each has its own method of identifying a piece of equipment, unlike standardized VIN numbers used by all auto manufacturers. Major equipment parts are not stamped with an identifying number, and once the piece of equipment is disassembled, it is very difficult to determine where the part came from. In addition, law enforcement officers generally do not know where to look for an identifying number on a piece of equipment.

Not only is equipment difficult to identify, but often there is a delay in reporting the loss. On a large jobsite, there may be many pieces of equipment which are both owned and rented. Unless the contractor has controls in place for identifying equipment on the jobsite, a missing piece may go unnoticed for days, weeks, or months, giving thieves plenty of time to dispose of a stolen piece of equipment, and also leaves a cold trail as authorities try to find equipment that is difficult to identify. It is not surprising, therefore, that authorities recover less than 10 percent of equipment reported stolen.

Other factors that contribute to contractor’s equipment thefts are:

  • Contractors failing to keep a current list of equipment that they own or lease, including the location of the equipment. This includes keeping a record of the manufacturer, PIN number, date acquired, model number and photo of each piece
  • Lack of security at equipment yards
  • Equipment spread over a large jobsite with uncontrolled access
  • Jobsites located in remote areas
  • Failure to take steps to prevent smaller, easier-to-steal pieces of equipment from being stolen
  • Failure to secure larger pieces of equipment

Theft prevention

Good management controls and security controls are key to reducing or eliminating theft losses. Controls should start with the individual piece of equipment and proceed to the equipment yard, then to the jobsite. The following is a list of controls for different areas:

The piece of equipment

  • The Product Identification Number (PIN) should be engraved or stamped on the major parts of the piece of equipment.
  • List each piece of equipment with the National Equipment Register (NER), http://www.nerusa.com/index.asp.
  • An owned list of equipment should be made showing the year, make, model, PIN and cost for each piece of equipment. The file should also include a photo of each piece of equipment.
  • Paint the equipment a distinctive color and stencil the name of the contractor, in large letters, on a number of places on the equipment.
  • Install alarm systems that either sound or immobilize a piece of equipment if it is tampered with.
  • Install GPS devices that track equipment, should it be stolen.
  • Install locked grates over windows and doors of the piece of equipment, which not only prevents theft but also vandalism.
  • Keep smaller pieces of equipment, such as mowers and small tractors, indoors.

In the Yard

  • The yard should be fenced, with limited access points.
  • Neatly arrange equipment in the yard in such a way that a missing piece of equipment will be noticed immediately. Management should make daily checks and determine if equipment is out on a job or has been stolen.
  • Pole lights, motion detection alarms and closed circuit TVs can enhance security in the yard.

On the Jobsite

  • Management should take a daily inventory of owned and rented equipment that is on the jobsite, with a list of equipment that is supposed to be there.
  • At the end of the day, place all equipment in a straight line, anchoring both ends with a large piece of equipment that would be difficult to move or steal. This not only makes it more difficult to steal a piece of equipment, it enables management to immediately notice when a piece is missing.
  • On very large jobsites, or jobsites that involve long stretches of land, such as road construction or pipelines, draw all equipment into a high-traffic, central location so that a missing piece will immediately be detected. Use of pole lights, closed circuit TVs and guards can further enhance security.
  • Small pieces of equipment, such as generators, air compressors and drills, should be returned to the yard at night, if possible.
  • Small pieces of equipment left on the jobsite should be placed in one spot and then circled or boxed in with larger, more immobile pieces of equipment.
  • Small tools and handheld power tools should be placed in locked boxes, and then placed in locked trailers.
  • Post “No Trespassing” signs at the jobsite and ask authorities to patrol the area during the off hours.

Equipment thefts are crimes of opportunity. Thieves will steal equipment that is easy to take when management is lax. They dislike when controls are in place, or when they can be easily detected. Implementing the proper controls will greatly reduce equipment thefts.

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