Article by latest.insure
Tradies usually don’t have the time or inclination to report the theft of their tools to the police. This can prove costly but, as this article explains, you can minimise your risks and invest in protection for peace of mind.
The Rising Issue of Tool Theft in the Construction Industry
More than 29,000 tools were reported stolen in Victoria alone in 2022-23, according to the Crime Statistics Agency. They were worth a collective $20M.
Meanwhile, the Housing Industry Association says theft of tools, equipment, and materials costs “millions of dollars” each year.
Preventive Measures and Best Practices
You may be already working to secure your work sites, tools, and equipment, so it may be timely to review your approach. Keep in mind, tradies’ tools are most likely to be stolen in the following order: via forced entry, cut padlocks, a smashed window, or from a vehicle.
Use our checklist for a risk management refresh:
The site:
- Install good lighting, audible alarms, closed circuit television
- Hire a security guard service
- Invest in quality lockable storage containers
- Lock buildings and vehicles that hold your equipment/tools, particularly overnight
- Get to know the site’s immediate neighbours to encourage them to report suspicious activity
- Erect temporary fencing with your contact details to help stop trespassers and thieves
- Co-ordinate deliveries, where possible, so there’s not a huge lag before they’re installed. Be mindful of leaving high-value (and risk) items such as copper items, major appliances, hot water heaters, windows, etc. in plain sight.
Your tools and equipment:
- Paint or engrave your gear with a unique mark or a driver’s licence number
- Record serial numbers and type of your gear
- Photograph your tools for easy identification
- Remove batteries and place in a safe spot to disable your equipment
- Consider placing an AirTag or other remote security device in with your tools (even artificial intelligence equipped ones)
- Remote lock your tools via smartphone
- Personalise the lock on a new toolbox, rather than use the mass manufacturer’s tamper-proof one
- Opt for heavy duty padlocks for your storage box and chain them to your vehicle
- Note when materials/tools are moved to and from the site (a barcode ‘check out’ and ‘check in’ system is handy here).
If your tools are stolen, make sure you register your loss with the free Property Vault website. Check Facebook groups, Gumtree, and pawnshops to track down their illegal resale.
Understanding Equipment Insurance
Equipment insurance or general property insurance, also known as trade insurance, covers you for the theft or accidental damage of tools and equipment. Most policies contain a general condition requiring that the premises are maintained in a good condition (to manage the risk of theft) and a condition that requires theft of tools or equipment to be reported to the police.
Typically, this policy covers costs to repair or replace your stolen gear whether it’s at your home, worksite, building site, or in transit. You’ll even be covered for equipment that goes missing while your employees have taken them home.
You won’t be able to claim on the land or building owner’s insurance except where the latter was at fault – they caused, contributed to something or an omission. Other exclusions include:
- Types of accidental damage (think wear and tear, computer viruses, mildew, flood, mould, data processing failure, including damage because of being left outside)
- Open-air theft
- Motor vehicles – you’ll need a specific policy to cover these and
- Your loss of earning capacity related to the missing item.
Is tool insurance worth it?
Insurance might cost a few hundred dollars a year, but what are your tools and equipment worth to replace? Consider the average insurance claim is more than $4,410. Insurers do pay out claims and that’s where we can help, as your broker and advisor, to take the pain out of claims processing.
Also, you can combine trade insurance with your other policies, which could earn you discounts and simplify your premium payment schedule. Let us help you with that, too.
Don’t let tool theft disrupt your construction business. We’re your guide to insurance tailored to your unique circumstances.
