Construction Specialty Equipment Losses - Prevent Expensive Setbacks
Contractors rely on specialty construction equipment – cranes, articulated dump trucks, vacuum trucks, concrete pumps, boom lifts and more – to perform specialized tasks at jobsites. Damage or loss involving high-value construction equipment can occur for a variety of reasons, causing expensive delays.
The good news is that there are straightforward and effective precautions to help reduce the risk of equipment losses. Here’s what contractors should know about the growing risk to specialty equipment and what strategies to use to help protect these assets.
What’s putting specialty equipment at risk?
Operator error, severe weather and fire hazards are among the leading threats to high-value construction equipment. These risks can strike suddenly – tipping cranes, flooding jobsites or igniting machinery. The fallout isn’t just expensive equipment loss – it’s a threat to crew safety, project timelines and a contractor’s reputation in an industry in which delays and incidents don’t go unnoticed.
Operator error leads to collisions and overturns
Even minor missteps during equipment operation can lead to major losses – damaging property, halting work and putting lives at risk. Collisions and overturns are often linked to human error, particularly when operating complex or heavy specialty equipment. There are three common scenarios in which human error plays a central role.
- Improper load handling and lifting practices. One of the most frequent causes of equipment overturns, particularly with cranes and concrete pumps, is the mishandling of loads. Operators may attempt lifts that exceed the equipment’s rated capacity or fail to account for boom angle, wind conditions or ground stability. In some cases, safety systems such as load moment indicators (LMIs) are ignored or overridden, significantly increasing the risk of a tip-over. These decisions not only endanger workers but can also cause extensive equipment damage and costly project delays.
- Failure to assess site conditions. Uneven ground, soft soil and improperly stabilized platforms are major contributors to overturn incidents. When operators skip proper terrain assessment before deploying equipment, they may unknowingly create unstable working conditions. Outriggers that aren’t fully extended or placed on inadequate cribbing can give a false sense of security – especially on slopes or poorly drained sites. Routine pre-operation site assessments are critical but often overlooked when crews are pressed for time.
- Inadequate spatial awareness and communication. Collisions often occur on congested jobsites where multiple machines, vehicles and workers operate in close proximity. Operators with limited visibility – due to equipment blind spots or lack of spotter support – may misjudge turns, back into structures or collide with other machinery. Miscommunication, or failure to use hand signals and radios, also contributes to costly incidents that, with proper precautions, might otherwise be avoidable. Clear communication protocols, proper signaling and effective use of spotters are essential to helping reduce these risks.
Weather-related accidents
Adverse weather impacts approximately 45% of construction projects and poses significant risks to heavy equipment.1 Heavy rainfall can destabilize worksites, reduce equipment traction and increase the likelihood of overturns. Flash floods often occur with little warning, leaving crews with limited time to relocate or secure high-value machinery, which can lead to abandoned machinery and severe water damage.
High winds are especially dangerous for tall or top-heavy equipment like cranes. Improperly secured machinery can collapse under wind stress, causing extensive damage, serious safety incidents and, potentially, loss of life.
Fire hazards
Fires represent a significant, often preventable, threat to contractors’ specialty construction equipment. Improper maintenance is a common root cause. Vacuum trucks and other heavy machinery have shown a high propensity to catch fire if they’re not routinely serviced. When maintenance is delayed, for instance, due to back-to-back projects, the risk increases.
Ruptured hydraulic lines are a common fire trigger; if fluid contacts a hot exhaust unit, ignition can occur quickly and engulf equipment in flames within minutes.
| Travelers claim examples | Incurred losses |
|---|---|
| Operator error A crane tipped over after an operator ignored a warning alarm while lowering a fully extended boom. |
$387,000 |
| Adverse weather Strong winds blew a gantry crane into a crawler crane, causing damage to both. |
$1,300,000 |
| Fire A hydraulic hose rupture at a rock crushing facility caused fluid to spray onto a hot exhaust pipe, igniting a fire that destroyed both the impact crusher and conveyor. |
$595,000 |
| Theft and vandalism An unknown individual poured sand into the fuel tank of a branded wheel loader. |
$297,000 |
| Theft and vandalism Four pieces of heavy equipment were deliberately set on fire at an insured’s jobsite. |
$775,000 |
Other common vulnerabilities contractors should not overlook
Theft and vandalism
Theft and vandalism remain ongoing risks for contractors’ specialty equipment. Opportunistic criminals can damage, destroy or steal equipment from unsecured jobsites. In some cases, specialty equipment is targeted for political reasons, such as protests or sabotage against certain projects.2,3
Cranes
Cranes can drive high losses due to how complex they are to operate and their high asset value. Therefore, even a single loss incident can have a significant material impact on a contractor’s business.
Owned vs. leased equipment
Ownership models influence loss profiles. With leased equipment, contractors often face daily rental fees, creating pressure to complete work quickly, which might lead to short cuts and more frequent loss incidents. Owned equipment, on the other hand, may not be maintained as diligently, as taking it out of service for repairs costs time and money. As a result, leased equipment tends to see higher claims frequency due to pressures to maintain project schedules, whereas owned equipment shows higher severity of claims, often attributable to deferred maintenance.
Risk management strategies that help safeguard contractors’ specialty equipment
With the rising frequency and severity of construction equipment-related losses, effective risk management is essential. The following strategies focus on reducing preventable incidents and protecting equipment assets through effective training, maintenance, jobsite security and planning.
Operator training and certification
Specialty equipment requires proper training to operate and, in many cases, formal certification. Especially in tight labor markets, when there is a greater likelihood of less experienced operators running equipment, risk of incidents like top-overs, collisions and equipment misuse increases. Comprehensive, jobsite-specific training is critical. Training may be performed in-house, by third-party trainers or directly by the manufacturer. The latter is often the best option; however, in-house or third-party training may also be sufficient if the training is performed by qualified trainers. For example, Travelers has a crane safety training program that covers safe lifting, hazard recognition and proper operating procedures to help business insurance customers mitigate these crane operating risks.
Robust site security
Layered security measures – such as locks, barriers, surveillance systems and on-site security personnel – are key to deterring theft and vandalism. Tools like GPS tracking on equipment, real-time alerts and up-to-date inventory records can support faster recovery if equipment theft does occur.
Preventive maintenance programs
Routine construction equipment maintenance helps reduce the risk of fires, mechanical breakdowns and other avoidable failures. Following manufacturer-recommended guidelines, assigning clear maintenance responsibilities and keeping detailed service records can ensure that critical upkeep tasks aren’t missed. All equipment, regardless of whether owned, purchased or rented, should have a specific inspection process to determine the working condition of the equipment.
Weather monitoring and response planning
Real-time weather tracking and clear action plans can help significantly reduce the risk of weather-related losses. For example, suspending crane operations in high winds or relocating equipment from flood-prone areas before severe weather strikes can go a long way toward preventing costly damage.
Protecting contractors’ most valuable equipment assets
Specialty construction equipment represents one of the largest capital investments for construction firms. A single oversight, weather event or act of vandalism can lead to major project disruptions and huge financial setbacks.
By implementing effective risk management strategies and with the advantage of Travelers’ industry-specific expertise, contractors can better safeguard their specialized equipment. Contractors can work with Travelers to help them design a broad insurance coverage plan tailored to their unique construction operation.
Learn more about Travelers’ expertise in the construction industry. Ask your insurance agent about Travelers insurance for your construction business.
Sources
1 Schuldt, S. J., et al. (2021). Weather-Related Construction Delays in a Changing Climate: A Systematic State-of-the-Art Review. Sustainability, 13(5), 2861. https://doi.org/10.3390/su13052861
2 Protest Over Park Project in California Results in Damage to Bulldozers and Other Equipment: https://www.kqed.org/news/11921415/protesters-block-construction-at-berkeleys-peoples-park-after-standoff-with-police
3 Protesters Claim Responsibility for Damaging Heavy Equipment to Impede Pipeline Project: https://www.desmoinesregister.com/story/news/2017/07/24/dakota-access-protesters-claim-responsibility-pipeline-sabotage/504136001/
