Best Practices to Help Insureds Prevent Construction Site Theft

During a construction project, protecting the site along with the materials and equipment can become quite a challenge. Following is a list of several best practices property owners and/or contractors should implement to prevent theft and vandalism losses on job sites involving buildings under construction or undergoing a renovation.

• Ensure security plan is aligned with the job site’s exposures and location.
• Implement video construction site surveillance not only after hours but also throughout the working day.
• If financially plausible, hire security guards. Be sure the reputation and experience level of all third-party providers have been properly checked.
• Implement proper lighting in every corner of the site and monitor motion sensors.
• Make sure on-site building materials and any equipment awaiting installation are properly secured in a locked area.  
• Store smaller portable items inside or under cover.
• Ensure the perimeter fence is secure and at least eight feet high.
• Restrict access to storage areas for keys to gates, buildings, equipment and storage locations to authorized personnel. Also, restrict access to the job site to one secure entrance/exit with a locking gate.
• Implement security checks on people leaving the premises. Put someone responsible for checking and logging vehicles entering or leaving the job site.
• Work with local authorities so they are informed when workers are allowed to be on the site and ask if they can perform extra patrols by your site during non-working hours.

Industry experts estimate equipment theft and vandalism on construction sites cost companies billions of dollars a year. Construction theft includes materials such as timber and other valuable commodities (scrap metal and copper); tools; and equipment such as bulldozers, backhoes, generators and welders. Vandalism on worksites includes broken glass, graffiti, destruction of constructed work and damage to equipment and vehicles on site. Research shows that construction sites are most vulnerable to theft on weekends and an estimated 90% of all construction thefts take place between 6:00pm Friday and 6:00am Monday.

Construction firms engaging in all types of projects are susceptible to theft and vandalism, impacting the success of a project and everyone related with the project, including the property owner, project team, and contractors. In addition to the direct monetary losses, there are indirect costs due to project delays and lost productivity

Material Delivery/Off Site Exposures

You should also have insureds look into what procedures are in place for the following:

• Are materials delivered on an as needed basis?
• Does the job site have someone responsible for receiving and verifying the quantity of materials?
• Is there someone responsible for supervising trash removal?
• Are off-site storage locations identified and evaluated to the same safety standards as the main job site?
• Has the transit operation been evaluated if the contractor and/or property owner is responsible for the material as soon as it shipped?

In addition to having strong loss-prevention measures in place, property owners and contractors should carry Builder’s Risk/Re-Modeler’s Risk insurance for ground-up new construction and renovations. Builder’s Risk/Re-Modeler’s Risk insurance “protects a person’s or organization’s insurable interest in materials, fixtures and/or equipment awaiting installation (or after installation) during the construction or renovation of a building or structure, should those items sustain physical loss or damage from a covered loss,” including theft and vandalism.

For more information about Distinguished’s Builder’s Risk/Re-Modeler’s Risk insurance program and its features and supplemental coverage for property owners, contractors and others, contact us.

Sources: Construct Connect, IRMI