Plant and Equipment Theft - A challenge Indeed
As we watch the engineering market develop in tough economic times, it seems that the Stolen Machinery Trade is doing exceptionally well. In our experience, machinery theft is on the increase, and we need to talk about the reality and risk management of yellow metal machinery:
How effective are tracking units in Heavy Machinery and Equipment?
It is well known that the benefits of fleet management systems for machinery operations are fantastic and allows a company owner to properly manage the billing as well as maintenance of their machinery, but is there really any benefit for an insurer?
We applaud clients who run a neat operation with constant monitoring of their assets, the monitoring of operator behaviour is also a benefit. However, it seems that when a TLB disappears, it is often accompanied by no tracking report, as the unit is almost always immediately removed.
Let me unpack this:
A vehicle tracking incident is a fast-paced theft and response. The vehicle is moved quickly and often even whilst in transit, tracking units are removed, but in the process tracking companies are presented the opportunity to track and recover the vehicle, wherein the tracking unit is well hidden and more difficult to trace and disarm.
When dealing with machinery theft, tracking units are not well hidden as the machinery does not lend itself to a complex instalment.
When sites are entered, they are more often than not, entered at night, security personnel are tied up and disarmed and the perpetrators are left with ample time to find and remove any tracking units that may assist in the recovery of these items. On discovery of the theft, the stolen items are long gone, and the tracking units are found on site.
To add insult to injury, the keys to these machines are often generic. Machines left on road construction sites are easy targets and entry to them seems to pose no difficulty.
This does not touch on the daytime robbery of machinery, mostly due to confusion of ownership on busy construction sites, as well as the casual theft of compressors and generators, which is a separate issue on its own.
It begs the question: whilst engineering underwriters have traditionally opted not to enforce the installation of tracking units, and now find themselves requesting these installations, are there any claims related benefits in installing tracking units?
South Africa is truly a unique place and, where our international players find themselves occupied with risk management pertaining to Fire and Accidental Damage, we are left scratching our heads on how to manage our theft risk.
A theft is a total loss, there is not recovery in salvage, in most cases, no recovery of stolen items and this has a drastic effect on rating structures in risk pools.
It remains an open discussion, one that we hope that our fellow industry experts will participate in:
What is the solution to the true management of theft risk of construction equipment in South Africa?
Total loss of engineering machinery can be exceptionally devastating to your client. Make sure that you are adequately insured, visit: www.bouwen.co.za. Your Plant All Risk Underwriters of choice.
Bouwen Engineering is a Juristic Representative of Tranquille Intermediary Services, FSP no 48264.