Tag Archives: construction crime

Copper Theft Solution Reduces Claims For Construction Sites

Copper theft presents a significant challenge for loss control.

Unlike other property crimes where “recovery” goes a long way toward mitigating the loss, such as the recovery of a stolen car in an auto theft, the recovery of the stolen copper seldom impacts the size of the claim.

Copper theft is different because the damage done to a building stealing a few hundred dollars' worth of copper can cost insurers tens of thousands of dollars to repair. The typical copper theft claim involves the damage done ripping wires and plumbing out of walls or the coils from a rooftop HVAC system. In vacant buildings, thieves target water lines and sprinkler systems as well as the electrical wiring. Once a vacant property has been hit, thousands of dollars must be spent to bring it back up to code before it can be occupied. It is this “collateral damage” that makes copper theft claims so expensive to an insurance company.

The key to reducing copper theft claims is prompt police response. The faster law enforcement arrives, the less time thieves have to damage the property. Faster police response is what wireless video alarms deliver and why they are a valuable tool for loss control against copper theft.

Copper theft has impacted insurance companies across North America, becoming a mainstream problem covered by television news. The following reports from television news underscore much of what this article is attempting to communicate — a new paradigm to mitigate risk and reduce claims impacting the real world from Virginia to Arizona.

Construction crime is a close cousin to copper theft and has been a black hole for risk management with few affordable solutions. The nature of construction risk is temporary and this means that wired surveillance cameras and alarm systems are simply too expensive and cumbersome to install to make them cost-effective.

The technology challenges are significant: in addition to limited budgets there is often no power, no phone lines, and no easy access to internet. Policy holders do not want to spend large amounts of money for temporary infrastructure that has no value after the job is done. For construction, human guarding is the most obvious approach, but it is beyond the budgets of many job sites. With guarding cost prohibitive, from a loss control perspective there have been very few affordable options for mainstream policy holders to protect their projects. Construction remains a problem child for many insurers who are forced to raise deductibles and implement exclusions to make construction profitable.

The following newscast from Buffalo, New York describes the challenges of securing a construction site and successes found with wireless video alarm systems.

While human guards have become too expensive and unreliable for many sites, technology is improving and loss control has a new tool to secure construction sites. Portable wireless video alarms give loss control professionals an affordable tool to deliver police response to a job site before the damage occurs. These new wireless camera/detectors (called MotionViewers) sense an intruder and send a short video clip of the incident over the cell network to a central monitoring station for immediate review and police dispatch and priority police response.

The immediate review/response with a monitored video alarm has proven more effective than human guards as the sensor/cameras are installed in multiple points across the job site to detect and report any activity. The crucial factor in reducing claims for copper theft is immediate police response, and video verified alarms make all the difference — the monitoring central station operator is a virtual eyewitness to the crime.

Police treat a video verified alarm as a crime-in-progress — they respond faster and they make arrests. Case studies on video verified alarms have arrest rates of over 50%. One construction site in Arizona had 40 arrests over four months on a single site. Arrests make a difference because one arrest prevents an additional 30 crimes — copper theft is typically done by habitual thieves who target construction sites or vacant property.

To be affordable and effective, the camera/sensors must be easy to install, without the cost of trenching cables and running wires. Power is a challenge as many construction sites have only temporary power provided by generators during working hours. Many vacant building have no power at all.

The wireless Videofied alarm systems need no infrastructure to secure a site. They operate for months or even years on batteries, communicating over the cell network to the central station. These portable MotionViewers are more effective than fixed cameras because they can be moved to protect the assets on a job site as the project evolves. Portability is important because construction theft is often an inside job by a subcontractor familiar with the delivery and location of expensive materials or assets — and they know the locations of fixed cameras and how to avoid them. In contrast, magnetic mounts on the wireless MotionViewers enable the job supervisor to move the cameras, placing them on steel studs and tool cribs at the end of the day to protect what is most at risk.

Wireless video verified alarms for outdoor applications mean that loss control professionals have an effective tool to fight copper theft that is affordable enough for implementation by their policy holders. For more information visit www.videofied.com.

Take The Construction Jobsite Crime Quiz

Cost Retention and Safety Enhancement: Protecting Your Assets

While construction activities are fluctuating due to the current economic situation, general, heavy/highway and specialty contractors continue to face increasing consumer and regulatory demands and requirements to provide a safe, healthy and secure work environment for their employees.

However, the consequences of theft and lack of security in the workplace are not always understood. Several states have contractor-based trade associations who partner with law enforcement, e.g. the Construction Industry Crime Prevention Program (CICP), which monitors, participates and assists contractors in protecting your assets.

To test your knowledge, Take the Crime Quiz

True or False:

1. Substance abuse is an important factor contributing to crime.
Unfortunately, True. The Construction Industry Crime Prevention Program has been notified that some construction firms have relaxed their hiring standards, including substance abuse polices, because of the severe labor shortage. Employee theft accounts for around 85% of a firm’s theft problem. One employee with a substance abuse problem can be a firm’s entire theft problem in addition to creating a safety problem on the jobsite.

2. Attitude has nothing to do with theft on a jobsite.
False. Rationalization and opportunity are two of the leading factors in employee theft. The common rationalization from some employees is “The contractor leaves all these tools, generators and equipment unprotected, because they are so rich. Obviously they don’t care. Besides, I need a drill at home.” Congratulations, you have just had a theft.

Most construction firms provide the opportunity for theft if there is poor or no inventory control at a jobsite, lack of inventory accountability, no one is watching payroll checks, or the firm is willingly handing out replacement tools and materials.

3. So long as employees are working and getting paid, the job is getting done.
True. However, job quality and efficiency can be compromised. Thefts and vandalism can rise in direct relationship to how employees are treated. It is always wise to review your layoff and termination procedures and see that they are carefully and calmly carried out.

Terminations alone account for some of the worst vandalism cases identified by the Construction Industry Crime Prevention Program. The Construction Industry Crime Prevention Program historically had taken a close look at these cases and in each one, the employee was terminated in front of his peers by an angry site manager. While one can sympathize with the site manager’s frustration — so often justified — but it can cost him/her dearly in the long run.

All jobsites should be made extra secure, locks changed, and an obvious tightening of security implemented following a difficult termination or layoff.

4. Using Tailgate Safety Meetings to discuss crime incident is detrimental and takes away from production on the jobsite.
False. Many contractors have controlled thefts by using a safety meeting as the basis for discussion. Routine and/or regular discussion of vandalism and theft can control the issue and raise awareness among the employees.

Ask for employee input. Treat the person with the best crime prevention tip of the month with a gift certificate. The majority of employees are honest, but they often perceive the company’s attitude as “not caring” because it is never discussed.

5. Posting signage to deter theft or a reward poster is beneficial.
True. Many crimes and theft have been uncovered because of postings and utilizing safety meetings to discuss items such as these. If you belong to a Construction Industry Crime Prevention Program, pass out reward fliers. Ask anyone with information to call the CICP hotline and remind them they can remain anonymous. State that losses are going to be investigated, and make a point of assigning someone the responsibility of securing the jobsite. Be obvious about looking through debris piles and control debris. A clean jobsite presents a concerned, careful attitude that will also send strangers on down the road to look for easier pickings.

6. Crime problems are not an issue in construction.
False. If you don’t think you have a crime problem, it probably isn’t being tracked. Check with your Safety representative, Risk Manager, Insurance loss control representative or claims adjuster to verify just how much this exposure is causing a problem.

Your safety rep, insurance representative, risk manager, law enforcement and the Construction Industry Crime Prevention Program can share with you various ways in which to lower your loss exposure as well as retain efficiency, productivity and replacement costs.

7. The majority of jobsites are cased during the day, especially for equipment.
True. Crime statistics reveal the job is cased throughout the day, especially for items which return a high dollar value on the black market.

All strangers should be challenged, and all visitors should be required to sign in at the job trailer or with the site manager and the rule must be enforced. Contact your CICP organization for appropriate signage to reduce your liabilities after hours. Signage, as offered by the Construction Industry Crime Prevention Program, offers a round-the-clock emergency crime hotline that is visible and well known to law enforcement and the public. This is a good deterrent.

8. Crime is preventable.
True. Keep padlocks closed at all times. Use only case-hardened padlocks and if you must use chain, it should be case-hardened as well. Check to see that padlocks are closed in recessed covers on bins.

With increasing insurance premiums, contractors cannot afford to ignore the long range implications of crime if they want to improve their bottom line and reduce their liabilities.

9. A suspect, including strangers, often returns to the scene of the crime.
True. They want to gauge the reaction on the jobsite. As Andy Warhol says, everybody has 15 minutes of fame. For contractors, indifference, no “tightening up,” and/or a business-as-usual attitude only escalates the suspect’s confidence and your theft problem.

Unfortunately, the repeated crimes of contractors’ job trailers or tool bins being broken into is an indication of a repeat offender. Besides, they get needed tools every time.

In 2001, California Youth Authority inmates informed the Construction Industry Crime Prevention Program of Northern California that they often vandalized a site and returned early in the morning to watch the site manager “yell and cuss,” knowing there would be little or no follow up. This reactive approach to theft gave the offenders the confidence to start up equipment, move it around, and cause more damage.

Proactive approaches to deter crime, theft and vandalism includes handing out reward fliers, addressing crime issues at tailgate meetings, tightening up on inventory control, and security. Motion sensor lights hooked up to alarms are also effective, especially when wired to come on in unexpected areas.

10. Crimes, vandalism and thefts are part of doing business, and insurance covers the losses.
False. Case studies revealed one contractor had sustained a $400,000 judgment. A juvenile raced his motorcycle all over their jobsite, causing major damage. He crashed the bike, resulting in him becoming a paraplegic. The judge ruled they did have “No Trespassing” signs, but they did not have enough!

Three 4- and 5-year-old children started up a backhoe in Berkeley. It took five patrol cars to get them stopped as they crashed into street barricades and generally caused havoc and panic for the residents.

The company was very fortunate: they were not sued by the neighbors, nor by the children’s parents for leaving the backhoe with the keys in it outside the locked gate. In addition, the news media did not “showcase” the contractor on the six o’clock news for endangering children who live in a low-income neighborhood. Fortunately, the only injuries sustained were to the equipment.

A contractor’s risk manager went pale when the Construction Industry Crime Prevention Program informed him that a drug addict, according to his statement, “needed a ride home” and drove one of their backhoes five miles over county roads, parking it near his house.

The possibilities of a tragedy in these scenarios is very real. Negative publicity, impact to public relations, associated costs and headaches do not need to be outlined for any risk manager, superintendent or owner. Even though the examples listed above are not your employees, the exposure and risk is out there. The bottom line is that the company loses money, injuries occur, and the liability is great, unless you take strong preventive measures to minimize this.

11. If your tools and equipment cannot be positively identified, in most cases the thief is the winner.
True. Mark all tools and equipment with the driver’s license number of a principal operating owner in a firm or clear company identification. Employees should be required to do the same. Take inventory. If your site managers can’t tell law enforcement or your insurance company what is missing following a theft and/or provide serial numbers, the thief is the winner. However, take caution, blue spray paint and somebody’s initials on a bunch of hand tools does not qualify as “positive identification.”

Tally your Score
So, how did you score in protecting your assets? Hopefully, 100%. Yet, if not, there are resources to help you. Contact your trade association, your state/regional Construction Industry Crime Prevention Program, and your loss control representative. These organizations can assist you in physical site surveys, law enforcement liaison and recovery of your assets. Be smart and get involved in cost retention and safety enhancement.