CONSTRUCTION THEFT

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CONSTRUCTION THEFT

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A Billion Here A Billion ThereAnd Pretty Soon
It Is Real Money
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• One major insurance company reported that a
  review of 133 large (over 25,000) contractors
  equipment losses found the following breakdown

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• Cause of loss of claims of total claims Loss
  Dollars of Total Loss Dollars
• Fire 33.0 24.8 2,079,797 25.0
• V MM 8.0 6.0 864,729 10.4
• Collision, etc. 50.0 37.6 3,266,770 39.3
• Collapse 9.0 6.8 558,161 6.7
• Falling Objects 1.0 0.7 41,771 0.5
• Theft 22.0 16.5 952,266 11.4
• Water 7.0 5.3 449,517 5.4
• Wind/Hail 3.0 2.3 111,459 1.3
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• TOTAL 133.0 100.0 8,324,470 100.0
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• The review also showed that the 133 losses
  represented only 10 of the total losses, but
  were 58 of the total Contractors Equipment loss
  dollars. Theft and VMM were almost 1/4th of the
  large losses.³
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The Theft Problem

• Accurate national statistics do not exist
• ISO shows 20 annual increase
• 50 of insured losses is theft
• More than 1,000,000,000 annually
• Only 10 to 15 recovered

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• Insurance Like driving your car while looking
  through your rear view mirror
• W. E. Demming

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WHOSE FAULT

• Insurance companies/Insurance Agents
• They are partly to blame
• Greed
• Profit
• Cash Flow
• Must grow to keep money coming in faster than
  going out

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WHOSE FAULT

• Policyholders
• Some have claim to get premium back
• Deductibles many 1,000
• Loss comes from profit
• To pay for 1,000 deductible with 5 profit
• Must sell 20,000 worth of product

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FRAUD

• 10 of people cause 80 of problem!
• The Cost
• Homeowners 33 1/3 of premium
• Auto Liability 30 of premium
• Workers Comp 25 of premium

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Equipment Theft By Type

• Rank Type
• Loader (includes Skid Steer)
• Tractor
• Backhoe Loader
• Forklift
• Dozer
• Harvesting Equipment
• Generator
• Excavator
• Trencher

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Equipment Theft Frequency

• Rank 2001 2000 1999
• Texas Texas Texas
• Florida Florida North Carolina
• North Carolina N.C. Georgia
• Georgia Georgia
  Illinois
• Missouri Indiana
  Missouri
• California Minnesota Indiana
• Pennsylvania Pennsylvania Ohio

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What Can Contractor Do?

• Hire only qualified employees
• Background checks
• DAC Services, www.dacservices.com
• American Background
• Avert, www.avert.com

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What Can Contractor Do?

• Interviewing Tools
• Job Candidate Profile Measures
• Safe Employee
• Honest Employee
• Loyalty
• Behavorial Sciences Tehcnology, Inc
• 800-548-5781

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What Can Contractor Do?

• St. Pauls Partnership with LOJACK
• Bought 5,000,000 worth of LOJACK units
• Sold at 50 reduction- few takers
• Sold at one free the next ½ price
• Gave them away
• This year gt1,000,000 recovered

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The Development of NER

• 2001
• NER formed
• Partnered with National Insurance Crime Bureau
• 2002
• January first recovery
• Formed several partnerships ARTBA, NUCA

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NER Operations

• Register equipment
• Provide loss information to insurance companies
  police
• Provides information to law enforcement 24 hours
  per day

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What Can Contractor Do?
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http//www.seton.com/cgi-bin/ncommerce3/ExecMacro/
product/Seton/designyourown.d2w/design?bobmca

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What Can Contractor Do?

• The Sapias St. Paul partnership
• Announced 30 January 2003
• A multi-year partnership
• Work together to provide St. Paul policyholders
  with the Sapias Fleet Intelligence TM solution
• GPS Based

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What Can Contractor Do? Sapias?
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What Can Contractor Do?

• Associated General Contractors (AGC)
• Associated Builders Contractors (ABC)
• Construction Safety Council (CSC)
• National Crime Information Center (NCIC)
• Local organizations such as NTCPA

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What Can Contractor Do?

• Trase, Inc. 800-468-7273
• Fuel locks
• Hydraulic cylinder sleeve locks
• Cargo Protectors 800-728-3038
• Special locks for stroage trailers
• www.cargoprotectors.com

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Who Does The Stealing?

• Amateurs
• Employees
• Disgruntled employee
• Addiction
• Lack of money for perceived needs
• Rival Contractors
• Professional Thieves

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What Can Contractor Do?

• Employee involvement
• Get local residents involved
• Get local law enforcement involved
• Get fire department involved
• Management must make theft prevention a priority
  or no one will

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What Can Contractor Do?

• Nine Tips for Job Site Security
• Keep site well lit
• Control Access to site
• Use security tactics to scare thieves away
• Make one person responsible for signing for
  deliveries
• Keep inventory to a mimimum (use just in time
  delivery)

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What Can Contractor Do?

• Safeguard tools equipment
• Spray paint distinctive color
• Sign in sign out tools
• Get Employees involved
• Involve employees in security in positive way
• Report all strangers
• Ask Police, Neighbors, for help
• Join local contractors associations

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What Can Contractor Do?

• Accountability
• Name who is responsible
• Spell out responsibilities
• What gets measured gets done

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What Can Contractor Do?

• Suggestions for jobsite security
• Remove keys from all unattended equipment
• Fuel locks, door locks, glass shields
• Keep areas well lit
• Use anti climb fence
• Have only one entrance
• Immoblize equipment, remove rotors, batteries,
  etc
• Duplicate serial s one hidden one obvious
• Take photos of equipment

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What Can Contractor Do?

• Keep accurate inventory
• Develop a jobsite security plan
• Make one person responsible for signing for key
  deliveries
• Keep inventory of materials to a minimum
• Have materials shipped as needed
• Have sign that says Protected by ______ Security
  Company

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What Can Contractor Do?

• Install kill switches on equipment
• Rekey ignition
• Most come with universal key
• Add your own ID s
• Engrave company logo

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What Can Contractor Do?

• Park large equipment in a train
• Use large equipment to protect small
• Make it clear that employees will be fired and
  prosecuted for theft
• Speak out on theft
• Remove all small equipment at night
• Make it difficult to steal and they will go where
  it is easy

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What Can Contractor Do?

• Post sign that says Guard Dog
• Record a dog barking and hook it to a motion
  detector
• Use lights activated by motion detector
• Use red laser lights to look like perimeter
  protection
• Use a fake security camera
• Mark all tools distinctively
• Micro chips

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What Can Contractor Do?

• Liability Issues
• Public protection
• Attractive nuisance
• Negligent entrustment

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Final Thought

• If you always do what you always did!
• You will always get what you always got!

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The End

• Thank you for your time!