Semi-precious metal, particularly copper, theft is a growing concern in Australia impacting various businesses and industry sectors, most notably construction. It has caused substantial financial loss, damage and disruption to construction project sites, telecommunication networks, power infrastructure and public transport.
Copper is a lucrative target for thieves due to its high resale market value and widespread use across various industries, with prices fetching up to $10 per kilogram. In May 2024 in Sydney, three contractors were charged with stealing over $3.5M worth of copper from infrastructure sites. Earlier, in 2023, an organised crime syndicate in Victoria was responsible for the theft of approximately $780,000 worth of copper wire.
Commercial property managers, commercial property owners, construction developers and contractors must ensure their building sites and assets (including construction materials) are adequately insured with appropriate coverage to guard against on site losses and damage caused by theft, including copper theft.
The following insurance policies should be considered:
Risk management and insurance for commercial property managers and owners
Industrial Special Risks (ISR) insurance provides coverage for material loss and damage to buildings, contents, and stock located on-site caused by an insured event, including theft. See more information on ISR in our article here.
In relation to theft of metal specifically, it is important to ensure that the theft sub-limit of liability under your insurance policy is adequate. The sub-limit of liability refers to the maximum amount the insurer will pay if a specified event takes place and is separate to the insurers aggregate limit of liability under the policy.
An inadequate theft sub-limit could lead to significant out of pocket expenses when repairing or replacing stolen property and could result in financial losses and disruption to your business operations. Policyholders will often think of theft in terms of stock, office equipment and the like, however consideration should be given to theft of “fixed infrastructure” particularly when the site contains a significant amount of copper or other metal in its construction (which is often the case for manufacturing locations). Cover is particularly important when a property becomes unoccupied, as it is more likely to be targeted by thieves (who need adequate time to access and remove copper from the premises as opposed to a typical ‘smash and grab’).
An unoccupied premises increases the likelihood of losses, as the absence of on-site response and access control measures often results in more severe damage when an event occurs. Insurers will typically apply high excesses and impose special conditions for such exposures. It should also be noted that some insurance policies contain conditions that render coverage invalid if a premises remains unoccupied for more than 90 to 120 days and there is a failure to notify the insurer of this.
Risk management and insurance for property developers, building and construction contractors
Contract Works Insurance provides coverage for builders and contractors against loss or damage during construction projects. Cover can be arranged under an annual ‘floater’ policy covering multiple projects or on a single project basis. It covers loss or damage to the works in progress and under construction as a result of theft, malicious damage, fire, storm or flood damage (amongst others) and protects construction materials, machinery, plant, equipment and tools. Please see further information on contract works insurance here.
Properties, whether under construction, fully operational or vacant and unoccupied, without adequate security protection are considered high risk due to their vulnerability to theft, fire, malicious damage, illegal dumping of items, trespassers, and squatters – see our article here.
Implementing robust security measures is essential for protecting buildings, property and assets. Property owners and those responsible for construction sites should install fences, gates, surveillance cameras, high-quality locks and deadbolts on entry points to restrict unauthorised access. Consideration should also be given to when materials are delivered to site, as uninstalled wiring is at a much higher risk of theft prior to being incorporated into the works.
Installing burglar alarms and motion-activated lighting is also recommended. Enhancing security with access control measures like key cards, biometric scanners, and employing security personnel to undertake regular site inspections and patrols is also recommended. These measures can help reduce the risk of theft generally including the theft of copper.
The rise in metal theft in Australia necessitates a proactive approach by property owners, developers, and contractors to ensure assets are protected. Implementing comprehensive security measures and maintaining adequate insurance will assist in mitigating the financial impact and operational disruption caused by such thefts.
Should you have any questions in relation to risk management for construction projects or your exposure to theft, please do not hesitate to reach out to Bellrock’s Team of Advisors.
