Authors: Karlin McLaughlin and Marissa Williams | Amerisure Programs
Equipment theft has emerged as a pressing issue in the United States, with an estimated cost to businesses ranging from $300 million to $1 billion annually. In addition to the direct financial implications of replacing stolen equipment and materials, there are significant “soft” losses, including project delays, downtime, cost overruns and contractual penalties.
The top 10 states for equipment theft collectively contribute to 63% of reported incidents. The National Equipment Register identifies mowers as the most frequently stolen equipment at 41%, followed by loaders (skid loaders, backhoes, and wheel loaders) at 18%, and tractors at 14%. The remaining percentage represents various equipment such as utility vehicles, excavators, forklifts, bulldozers, generators, trenchers, and rollers.
Shielding Your Assets
With such a potential for loss, it is vitally important to safeguard your equipment. Below are some of the ways to actively prevent equipment theft in your business.
For those who own contractor’s equipment or rent equipment from others, be sure to utilize best practices and implement methods to prevent theft:
- Never leave keys in the unit or around the job site. Install barriers, such as fencing with locked entryways, around the entire perimeter.
- Employ job site lighting and monitored surveillance systems to deter and catch potential thieves.
- Avoid leaving equipment unattended at the job site whenever possible. Utilize gang boxes (also known as a work box or toolbox) to store and lock smaller tools and limit easy access.
- Brand your units in a way so they are identifiable and noticeable – such as painting your equipment with bright colors.
- Register your equipment with the National Equipment Register.
- Maintain an electronic inventory of equipment for easy identification of missing items.
- Conduct background checks on employees and customers. Employ security guards to patrol equipment storage sites.
If you are renting your equipment to others, identifying your customer base becomes crucial. Measures to prevent theft include:
- Requiring multiple forms of identification from your renters. Insist on proof of insurance and confirm coverage prior to leasing equipment.
- Installing video cameras at rental sites for easy customer identification and to help capture potential theft.
- Ensuring payment methods are valid and that transactions are recordable; do not allow cash transactions.
- Requiring proof of insurance and confirming coverage prior to leasing equipment.
- Inquiring about the lessee’s intended use and the associated area’s crime score.
- Asking questions such as “Will you be lending this equipment to others?”
Your Robust Rental Contract
Another way you can protect equipment during the rental process is to have a strong rental contract and enforce it. Steps can include:
- Be sure all parties involved clearly understand contract terms.
- Incorporate an insurance clause requiring renters to carry their own property and liability coverage.
- Include a hold harmless clause which waives you from liability upon a loss from equipment.
- Include an assignment clause that limits the lending of equipment to others.
- Add a waiver of damage to your contract to further protect equipment from harm.
Looking Ahead
In the unfortunate event of equipment theft, prompt action is crucial. Act swiftly by contacting law enforcement to report the theft and notifying your insurance carrier promptly. Taking these proactive measures not only accelerates the recovery process but also reinforces your resilience in overcoming setbacks.
For expert guidance on insuring contractors’ equipment and navigating with confidence, visit Amerisure.com. We’re here to empower you with the tools and support needed to protect your business and as well as your bottom line.
The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content, and materials contained in this article are for general informational purposes only.
