Gulfshore Insurance > Gulfshore Blog > Commercial Risk Management > The Growing Problem of Contractors’ Equipment Theft

Commercial Lines The Growing Problem of Contractors Equipment TheftTheft of contractors’ equipment continues to be a serious problem for the construction industry. The National Equipment Register (NER) estimates the total value of equipment stolen from construction sites to be between $300 million and $1 billion annually and rising. And, these estimates don’t include additional costs associated with stolen construction equipment such as renting replacement equipment, lost productivity, schedule delays, and increased insurance premiums. Delays can lead to missed deadlines which can result in hefty penalties.

The risks and liabilities that come with vacant construction sites can be extensive. These risks can quickly turn to very expensive costs. We’ve put together a list of ways to reduce the risks if you have to maintain an idle construction site. These steps can help protect your materials and equipment, while reducing liabilities for injuries or damages to surrounding properties.

Inventory Control

The first step in effective theft prevention is for contractors to know exactly what equipment they own or lease and where it is at all times. Procedures should be established to maintain an inventory control program which, at a minimum, records the following information on each piece of equipment:

  • Equipment manufacturer and model number
  • Serial, VIN or PIN number – if none is available, a unique number should be placed on the equipment and recorded
  • Date of purchase (information needed in the event of a claim, manufacturers’ recall, evaluation of equipment durability and related issues)
  • Location of storage and use
  • Photograph
  • Personnel authorized to operate the equipment


Mobility vs. Value

Equipment owners should consider the mobility of equipment as well as value to determine where to focus security efforts. Contractors often concentrate only on their highest value equipment neglecting to consider how easily other equipment can be moved. Cranes, for example, are high value items, but are seldom stolen. They are difficult to transport and easy to identify making them hard to resell. According to the NER Equipment Theft Report, three types of equipment account for 78 percent of the losses: riding mower/garden tractors, loaders, and tractors. Within the loader category, skid steers and backhoes are the predominate target for theft. These types of equipment can be easily transported using a trailer and easily resold since they have few unique characteristics. Other commonly stolen equipment are generators, compressors, welders, pumps, and arrow/ message boards.

No single method or device can eliminate theft. However, there are ways to reduce theft losses:

  • Secure the premise/work site
  • Secure individual equipment
  • Register equipment
  • Track equipment

An effective theft prevention program will include more than one approach and be adapted to reflect variations among construction sites. Supervisors should be held accountable for implementing the theft prevention program and job site inspections should be made to verify its effectiveness.


Secure the Premise/Work Site: Securing the entire construction work site is a common theft prevention practice used by general contractors. It can be very effective for smaller, well-defined sites, but cost prohibitive for larger, more spread out work sites. Securing the entire premise usually involves one or more of the following:

  • Perimeter fencing
  • Controlled access points (as few as possible)
  • Police patrol or private guard service, particularly during off-hours
  • “No Trespassing” signs posted along the perimeter
  • Proper illumination throughout the site
  • Closed Circuit Television (CCTV)


Register Equipment: NER offers a voluntary registry service that consists of entering a machine’s serial number, engine number, transmission number and other selected identification numbers into a database that’s available to law enforcement. All registered vehicles are marked with NER decals, which acts as a theft deterrent and increases the likelihood of detection while a thief is moving, storing or selling the equipment. Additionally, many insurance companies either offer discounts for companies who register their equipment or waive the theft deductible if a registered item is stolen.

Track Equipment: There are different types of tracking systems on the market. Some are designed to recover stolen construction vehicles and equipment after a theft. When the owner discovers the equipment missing and calls law enforcement to report the theft, the systems are automatically activated. Others, such as GPS (global positioning system) fleet management systems have the ability to continuously monitor and track construction equipment. Most GPS systems have a “geofence” capability that generates an alert if a vehicle leaves a permitted area or enters a prohibited area. In addition, many systems can define a secure period (i.e. off-hours) and generate an alert if a vehicle moves or is moved during that period. Another capability of a GPS-based system is the use of software to electronically lockdown or disable vehicles so they cannot be moved. With this system, a contractor can remotely disable or enable equipment ignition, monitor vehicle condition, and generate an alarm if the equipment moves outside of predetermined boundaries.

Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.