Risk managers can help deter theft of construction and agricultural equipment by focusing their efforts on protecting high-value, easily transported machinery, according to a new National Equipment Register report.
Smaller, unsecured equipment is most vulnerable to theft, NER said, and nearly 40 percent of all construction and agricultural equipment theft occurs in just five states.
NER, a database company established to reduce heavy-equipment theft rates and increase recoveries of stolen equipment, said that based on more than 5,000 theft reports submitted to NER in 2005, Texas leads all other states in the number of heavy-equipment thefts, followed by California, Florida, Missouri and South Carolina.
NER's study also found that most equipment is stolen from non-owner premises or work-site locations, which are likely to have lower security than owner premises.
In 2005, it said, more than 70 percent of stolen equipment was taken from work sites. Less than 30 percent was stolen from insureds' premises, which are typically more secure, fenced storage facilities.
NER based this third annual report of construction and agricultural equipment theft in the U.S. on its database of over 77,000 theft reports and Insurance Services Office (ISO) data. The report is the most detailed analysis of construction and farm equipment theft ever published.
The NER study also found that:
oFive types of equipment account for 78 percent of all losses
oTheft is by far the most frequent risk to construction and agricultural equipment, compared with other risks, such as fire, collision, vandalism and water damage
oEquipment age determines the likelihood of theft (in contrast to auto theft, newer makes and models, from 2000-2004, represent more than 70 percent of thefts reported to NER in 2005)
oThe top four brands of equipment reported stolen to NER in 2005 were Caterpillar, Bobcat, John Deere and Kubota.
The report noted a rise in theft reports from states hit by Hurricane Katrina and other big storms in 2005. Since the end of August, there has been a 22 percent increase in thefts from the Gulf region. In the weeks following each hurricane, the thefts occurred primarily in neighboring states, NER said.
According to NER, as more equipment moved into the storm-damaged areas, thefts increased there, as well. The type of equipment stolen in those regions reflects typical theft patterns: over 60 percent of the thefts reported were for skid steer loaders, backhoes and small to medium-sized tractors.
"Not surprisingly, the availability and ease with which equipment can be stolen are the two factors that determine theft rates. A great deal needs to be done to improve equipment security as a deterrent against theft and to recover stolen equipment," said David Shillingford, president and chief operating officer of NER.
The NER report includes statistical analyses and advice, such as recommendations to focus risk management efforts on high-value equipment that is easily transported and make accurate information available to law enforcement 24 hours a day.
It also advises helping to educate law enforcement personnel and buyers of used equipment about theft "red flags" to look out for, such as the type and timing of transportation, missing decals, unusual paintwork and missing identification plates.
The study is available to NER member insurers, their policyholders and law enforcement. Requests for a free copy of the 2005 Equipment Theft Report can be e-mailed to info@NERusa.com.
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