Should builders insure their tools?
Tool theft is rife around the country at the moment and if it hasn’t happened to you yet, you’ve probably at least heard of it happening to someone you know. We’re urging all tradies to take extra precautions when on site and to ensure tools are securely locked away, ideally out of sight from the road, at night.
What’s happening out there?
Wellington: Police are warning contractors and tradesmen to secure valuable tools and equipment after an increase in thefts targeting construction sites and work vehicles across the region.
Auckland: Police arrested a “prolific property crime offender” after carrying out a search and seized a large amount of suspicious property including several thousand dollars worth of electronics, trade and electrical tools.
Otago: In Cromwell late last year a bricklayer lost $6,500 worth of tools when the house he was working on was broken into. And in Dunedin, a trailer, tools and a generator were taken in a single weekend in separate incidents in April.
Hawke's Bay: More than $100,000 worth of stolen building materials, tools and equipment was recovered in Hastings in August last year. Hawke's Bay police said the haul included circular saws, nail guns, timber, a set of windows, bags of plaster, scaffolding, electrical wires, dive tanks - and an entire new kitchen.
Coromandel: In Whitianga $25,000 worth of tools and plumbing gear was stolen from a site on Hopping Place. A man was arrested and found with two drop saws, one with a diamond cutting blade.
Waikato: 14 toilets were stolen from a site in Hamilton East, along with thousands of dollars worth of tools from developments in Horotiu and Te Rapa. Thieves also stole a Nissan Navara, a trailer and $10,000 worth of tools from Hamilton developments.
Christchurch: In 2016 one business had $78,000 of power tools and laser levels stolen. In February this year a 24-year-old painter told police he carried out the theft of goods worth thousands of dollars from parked cars in Halswell driveways at night. He also targeted power tools by breaking into tradesmen’s vehicles.
Builtin has also heard of one incident in which a whole shipping container full of tools was stolen from a building site!
What should you do?
Police are urging builders, project managers and contractors to be vigilant and take steps to reduce the opportunity for offenders to target construction sites. Security around construction sites is essential. Fencing acts as a deterrent but good locks are important too. The police’s advice to any company with valuable tools and equipment is to make sure they are not left in unattended vehicles that aren’t kept in secure premises overnight and at weekends. This same crime prevention principle extends to construction sites where owners and contractors are encouraged to assess the risks of leaving valuable equipment and tools at vulnerable sites. At a minimum, make sure keys are removed and vehicles locked.
Where possible, vehicles that contain tools should be garaged or parked off the roadside and alarmed. If you have a container on site where you store tools this should be fitted with a heavy duty lockbox-style steel cover to prevent the padlock being cut. Portable alarms are also recommended for on site storage containers.
Police recommend people record serial numbers of tools or engrave them, which makes it easier to recover them under search warrants or at secondhand dealers, and to prosecute offenders.
Keep your asset register up to date
To make a claim under a tools & equipment (also known as mobile assets) policy you need to prove your loss. Make sure you have an up to date tools/asset register that includes:
• Item description, including model number
• Serial number
• Date of purchase
• Purchase price
It would also be ideal to keep invoices and photos of all items.
Only your tools & equipment are covered
This means tools owned by the insured entity (eg. the company). It does not cover tools owned by subcontractors on a site, they should insure their own. Employees may have cover under their own contents insurance in some cases, under the terms of some employment contracts and optionally in some contract works policies (with restrictions).
If you employ staff and contractors make sure they understand this. If you are an employee, check your contract and/or contents policy to find out.
Theft of or damage to trailers
These should be insured as commercial vehicles, they can’t be insured under a tools policy.
Indemnity/market value vs replacement value cover
Indemnity or market value polices will only pay what the tool is worth when the claim is made, you have to make up the difference to buy a new one.
Replacement value cover will replace any item (that can’t be repaired) for new, regardless of its age or condition. The sum insured must be the replacement value of your tools. Beware, as some policies that claim to be for replacement value will revert to market value on items more than a few years old, so check the fine print.
Theft in the open air vs forced entry (burglary)
Tools and mobile assets policies make a distinction between theft and burglary. Theft is generally considered to be when an item is stolen “in the open air”, that is without any sign of forced entry. So, it would be considered theft if tools were stolen from an unlocked van, but burglary if locked doors were forced to gain entry. The same applies to tools stolen from site or other types of storage. Some policies may include burglary but not theft in the open air.
Even if your policy does include theft in the open air, theft excesses can differ. It’s common to see a $1,000 excess for burglary but $2,500 for theft. You can find policies with options for lower burglary excesses and specialist insurers like Builtin also offer a $1,000 excess for theft.
In a nutshell
Having your tools stolen can be a massive inconvenience, cause delays and cost money. Taking preventative measures, keeping good records and having the right insurance cover will ensure that if something does happen you can be back to work quickly and not be out of pocket. You can request a quote at builtininsurance.co.nz/tools