“Heartbreaking” Construction Site Theft Hobbles Small Business

Expensive construction equipment left unattended on jobsites can be tempting for would-be thieves. In one recent case, a trailer containing about $125,000 in equipment was stolen from a small business in Detroit, Michigan, including a Bobcat skid steer. Security footage from the Jan. 16 theft shows the suspects attaching the company’s trailer to their own vehicle and driving off with it in broad daylight, WXYZ reported. The owners told reporters the theft was “heartbreaking, to say the least” and said the Bobcat skid steer was “critical” to their plumbing and general construction work. 

While Detroit Police are investigating the case, the owners of the business — a man and his nephew — say they are now unable to complete current projects and are missing out on future job opportunities. 

“Unfortunately, this type of theft is happening more and more,” said Sam Gritzmacher, Underwriter, Commercial Insurance, Burns & Wilcox, Minneapolis, Minnesota. “I do not think there are many small businesses out there that can lose $125,000 and just move on. It could destroy a business in one day.” 

This a perfect example of the need to be very specific when scheduling equipment on an insurance policy to ensure there is adequate coverage.

Depending on where the incident occurred, losses from construction theft may be covered under Inland Marine Insurance, the Business Personal Property (BPP) Coverage on Commercial Property Insurance, or Builder’s Risk Insurance. 

“This a perfect example of the need to be very specific when scheduling equipment on an insurance policy to ensure there is adequate coverage,” said Steven Hrab, Director, Construction, Burns & Wilcox, Toronto, Ontario. 

Construction theft on the rise 

The incident is not unique. In Wildwood, Florida, police recently warned residents of recent thefts of plywood and drywall from a residential development, Villages-News reported Feb. 23. Tools and building supplies were recently stolen from a school construction site in Hopkinsville, Kentucky, WKDZ reported Feb. 24. Earlier this month, heavy equipment including a Caterpillar skid steer was stolen from a construction site in West Shreveport, Louisiana, KTAL/KMSS reported Feb. 12. 

Builder Magazine reported in 2022 that jobsite theft was increasing, and logistics tech firm Transparent Path indicated in 2024 that 85% of construction businesses were experiencing some form of theft, including a growing risk of construction tool theft. 

“Theft-related losses in general have gone up,” Gritzmacher said. “That is just the way of the world right now.” 

Unfortunately, this type of theft is happening more and more. I do not think there are many small businesses out there that can lose $125,000 and just move on. It could destroy a business in one day.

Due to the nature of construction work, expensive equipment may be left outdoors on construction sites overnight, presenting an increased risk for theft compared to equipment that is secured indoors, Gritzmacher said. 

“A big reason why construction equipment is stolen is that it is valuable, and it tends to sit on jobsites,” he said. “There could be 100 different things being used and chances are they are not picking up every last thing every single night. They may just park a trailer outside of the construction site, which tends to be a little easier to steal from.” 

Companies can also be more vulnerable to theft when their jobsites are particularly active. “When there are many tradespeople on site, there can be a level of confusion,” Hrab said. “It is very important to have experienced supervisors and general contractors on site to ensure safety and loss prevention during a build.” 

Identifying the right insurance coverage 

According to security company Deep Sentinel, construction site theft causes about $1 billion in estimated annual losses. Without insurance, even a single construction theft loss could be damaging to a business, Gritzmacher said. News coverage from the Detroit theft in Detroit described the owners as “pretty distraught” afterwards, “which tells me they may not have been covered by insurance for the equipment that was stolen — then you are out of luck,” he said. “It shows how important it is to be adequately covered for everything you have.” 

Insurance policies that cover theft of construction equipment include Inland Marine Insurance, Business Personal Property (BPP) Coverage under Commercial Property Insurance, and Builder’s Risk Insurance. The applicable policy depends upon where the theft occurred, Gritzmacher explained. 

“If you have equipment or tools that stay on your premises at all times — for example, a woodworking business — your equipment and tools would be considered BPP within your Commercial Property Insurance,” he said. “That can cover replacement costs up to your policy limits, and the covered perils would be things like fire, wind, hail, water, and theft.” 

Inland Marine Insurance is designed to cover “equipment that you take with you to a jobsite anytime,” Gritzmacher said. “If it leaves the premises, it is no longer your Business Personal Property. It is now considered in the Inland Marine equipment.” 

It is one of those things where it is ‘never going to happen to me’ until it does. This is generally an inexpensive policy, and it really helps round out the coverage that you might need.

This type of policy is needed “for the smallest tool all the way up to a $125,000 skid steer,” he said. “If it is off premises, it would be written on an Inland Marine policy.” 

These policies can usually be written with the same insurance carrier. Builder’s Risk Insurance protects buildings and structures that are under development, renovation or construction. “It can cover the building itself while it is being built and all of your equipment while it sits there,” Gritzmacher said. 

Contractor’s Pollution Liability (CPL) Insurance, which can cover pollution-related construction losses, is also important for construction companies. “It is one of those things where it is ‘never going to happen to me’ until it does,” Gritzmacher said. “This is generally an inexpensive policy, and it really helps round out the coverage that you might need.” 

‘Site security’ may be required 

A knowledgeable insurance broker can help construction business owners determine which types of insurance they need. “It is important to be well-informed,” Gritzmacher said. “I would encourage everyone, especially small business owners, to speak one-on-one with an independent agent or broker and go through everything they need covered.” 

When purchasing insurance, business owners may find that they are required to have jobsite security measures in place, Hrab pointed out. “Most construction policies will require some form of site security or preventative measures,” he said. “Examples include proper fencing, centrally monitored burglar and fire alarms, as well as site lighting at gates or entranceways.” 

Most construction policies will require some form of site security or preventative measures.

For larger projects, Hrab said, a security guard may be requested on the build site. “These are all intended to prevent and deter losses such as theft and vandalism from occurring,” he said. 

Specialized trailer locks may also be helpful, Gritzmacher said. Business owners “should take as many precautions as possible while also being adequately insured,” he said. 

“It is extremely important to speak with your insurance broker and make sure that you are getting a policy that is tailored to fit your exact needs,” he said. “By having everything as secure as you possibly can while also being adequately covered with insurance, you can hopefully avoid issues like this business in Detroit experienced.”