How to Handle Stolen Equipment

Each year, only about 21% of stolen construction equipment is recovered, leaving most losses unrecouped. While thieves frequently target smaller tools and generators, even one missing excavator or skid steer can cause major financial and operational headaches.

As Jim Johnson—loss control construction specialist at Central Insurance—explains, “you hear about equipment theft often enough that it’s something every contractor should plan for. The smaller items, like tools, welders, and generators, tend to walk off first. But when a large piece goes missing, it hits hard.”

In this article, Johnson offers expert tips on how contractors should handle the discovery of stolen equipment and provides advice on how to minimize the risk of such incidents happening in the first place.

Step 1: Confirm the Theft of Stolen Equipment

Before jumping to conclusions, one of the first step contractors should take when they think equipment is missing is to verify. 

“First, they need to make sure that the equipment was indeed stolen and not borrowed by an employee or left at another jobsite by accident,” Johnson explains. “I’ve heard stories where someone thought something was stolen, and it was actually being used elsewhere.”

Keep in Mind: Although it may seem obvious, this step is important in the equipment theft recovery process, as falsely raising the alarm too often can create a culture of mistrust between employees and leadership.

To help streamline verification in the event of a possible theft, Johnson recommends contractors assign each tool or piece of machinery to a specific project and maintain an updated equipment log throughout the job.

As Johnson sees it, the more detailed the contractors are, the better, as tracking serial numbers, assigned locations, and responsible personnel ensures accurate oversight. “If you keep detailed records of what equipment is assigned to each job, you’ll know exactly where it should be and can confirm quickly if it’s truly missing,” he says.

This level of organization can save hours of wasted effort and unnecessary panic, allowing you to move swiftly from discovery to recovery when theft is confirmed.

Step 2: Contact the Authorities to Report Stolen Equipment

Once theft is confirmed, call law enforcement immediately. A police report is essential for both recovery efforts and insurance claims.

From there, conduct your own internal review. Johnson recommends running through the following checklist:

• Was the jobsite secured after hours?
• Were keys or access codes properly controlled?
• Could a former employee or subcontractor have been involved?

Johnson emphasizes the importance of accountability: “You need to figure out not just what was stolen, but how. Did someone leave it unlocked? Did a piece of equipment get left out overnight? Understanding the failure point helps stop it from happening again.”

Step 3: Notify Your Insurance Carrier About the Stolen Equipment

After contacting the police, your next step should be notifying your insurance agent or insurance carrier directly. An inland marine policy, which can provide financial protection to mobile tools and machinery, whether on a jobsite, in transit, or stored off-site, can typically cover construction equipment.

“There are usually two types of coverage,” Johnson explains. “Large equipment, like bulldozers or excavators, may be listed individually by serial number and value. Smaller tools are often grouped under a blanket floater policy. Contractors should review these schedules regularly to make sure everything’s listed correctly. If you sell or buy new equipment, update it right away.”

Failing to keep policies current can leave contractors underinsured or paying for equipment they no longer own. Johnson emphasizes that timely communication with your insurance partner can speed up the claims process and help determine the necessary documentation. 

Additionally, contractors should maintain photos and ownership records for all insured assets. These records not only verify ownership but can also assist law enforcement and insurers in recovering or replacing stolen property.

Step 4: Keep the Job Moving After Equipment is Stolen

Delays can be costly, especially when thieves take critical machinery. But most contractors are resourceful and resilient. 

“You don’t see a jobsite just stop because of theft,” Johnson notes. “They’ll instinctively find ways to keep going, either by renting replacements, borrowing from another site, or calling a partner they trust.”

To facilitate this, Johnson recommends contractors establish relationships with trusted rental companies ahead of time and know who to call when a replacement is needed. 

“If you’ve already got those partnerships in place, you can get equipment delivered the same day instead of spending hours trying to track something down.”

He also advises that contractors carefully document any delays or added costs resulting from theft, as this information can be vital for insurance claims, project reporting, or client communications. Transparent documentation helps demonstrate due diligence and protects contractors if disputes arise from missed deadlines.

Finally, don’t overlook the human side of the disruption. Equipment theft can create frustration and lower morale, especially for teams working under pressure. Taking time to regroup, communicate next steps, and emphasizing that the team is handling the issue professionally helps keep your crews focused and productive.

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Step 5: Strengthen Security Against Stolen Equipment for the Future

Once you resolve the immediate crisis, it’s critical to shift focus from recovery to prevention. 

While you can’t always eliminate theft, a few targeted loss control measures can dramatically reduce the likelihood of it happening again. 

Start by reviewing your jobsite layout, storage areas, and access points to identify weak spots. “Most thefts are crimes of opportunity,” Johnson explains. “If a site is dark, open, or disorganized, it becomes an easy target.”

Other advice Johnson offers to help deter equipment theft in the future includes:

Use GPS trackers or hidden AirTags on valuable assets to enable faster recovery.

Johnson also recommends enrolling equipment in the National Equipment Registry (NER). “There’s no national database for construction equipment unless you join NER,” he comments. “If a stolen item turns up at a pawn shop, border checkpoint, or auction, that database connects it back to the rightful owner. It really helps law enforcement recover property faster.”

For high-value machinery, some contractors install battery disconnect switches or other hidden deterrents to render the equipment inoperable without authorization. Combined with clear signage, lighting, and surveillance, these strategies send a strong signal that the site is actively monitored and secured.

Finally, Johnson advises that contractors review theft trends and lessons learned with their teams. 

Regular toolbox talks—or debrief meetings—ensure employees understand what happened, how to prevent similar incidents, and why vigilance matters. 

“Awareness is huge,” Johnson emphasizes. “The more your team knows what to look for, the more they can help protect your investment.”

Understanding Insurance Implications of Stolen Equipment

While an isolated theft typically won’t impact premiums, repeated incidents can. 

“If a contractor has several claims in a short period, that’s a red flag,” Johnson cautions. “It tells underwriters there’s a deeper issue; either they’re being targeted, or they aren’t addressing site security properly.”

Insurance carriers may respond by requiring additional controls or, in extreme cases, declining coverage. Regular loss control consultations help contractors identify vulnerabilities before they become patterns.

“It’s not just about replacing stolen equipment,” Johnson adds. “It’s about making sure there are lessons learned and you’re not an easy target next time.”

Central’s Commitment to Contractors

At Central Insurance, we understand that theft can create more than just financial strain; it can disrupt workflows, delay projects, and damage a reputation. That’s why our construction specialists work hand-in-hand with contractors to strengthen loss control practices and build proactive protection.

With nearly 150 years of experience and an AM Best rating of “A” Excellent, Central delivers the stability and expertise contractors can count on. From customized inland marine coverage to hands-on loss control support, we’re here to help keep your operations running strong, even when challenges arise. 

When you partner with Central, you gain more than insurance coverage. You gain a team that understands construction, respects your work, and helps you protect what matters most.

Reach out to your local Central agent today to implement an individualized loss control program that keeps your company secure.