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Metal thefts and threat to plastics industry – what it means for businesses

Author: Paul Hodgson, Director, Commercial Underwriting, MMA Insurance
“Metal thieves cause travel chaos for commuters” – it is a headline we are now used to seeing due to thieves targeting the UK’s railways.  But why are metals so valued? Prices for global metals such as copper and lead have been rising due to the demand from booming industrial economies such as China. Scrap metal is big business, recently estimated to be in the region of £770 million so it is no wonder there has been a 70% increase in metal theft in some areas of the UK.Metal thefts and threat to plastics industry – what it means for businesses 2

The British Metals Recycling Association (BMRA) has estimated that over 15,000 tonnes of metal is stolen in the UK each year, and high demand is causing the thieves to widen their nets.  Thieves are also now becoming much more resourceful. It is not just the train operators that have to worry about metal theft, there have been rises in other metal thefts such as road signs, drain covers, supermarket trolleys, charity clothing banks, letter boxes, children’s playground fixtures and wheelchair ramps.

At MMA we are beginning to see a trend for wider claims relating to metal theft.  Particularly, beyond the obvious targets such as church roofs, manhole covers, batteries and businesses where metal is widely known as being used such as jewellers, tool manufacturers, precision engineers. Thieves are now also a threat to the plastics industry, where they are targeting the brass tooling and dies which are needed to produce plastic products.

Ironically, while the thieves are motivated by what they view as high values for the scrap metal, for businesses, it is not the raw material replacement costs of items such as brass and dies that is the issue. In fact it is the replacement tooling costs and interruption to businesses that can result in six figure loses. UK businesses have had a tough year and are already struggling with the economic downturn, they simply cannot afford to be hit by any interruption of this sort. At MMA we have seen  the average cost of theft claims to the plastics industry of around £100,000.

Unfortunately the consequence of these higher cost claims may mean that insurers need to raise their premiums as they reassess the theft risk in a number of different industrial sectors, as well as ensuring that the properties that they insure are adequately protected against theft.  Adopting good quality risk management practices can help businesses offset the higher cost of insurance cover, and summarized below is MMA’s advice to businesses.

Review your storage

  • Reassess your current inventory and machinery equipment and identify what may be attractive to metal thieves.
  • Consider where you store your equipment and place all items in a secure, locked area and monitor access and stock control.
  • Make sure your stock is locked down in the daytime too and be weary of potential “scouting” trips by visitors who ask to gain access on a false basis so they can view your stock.
  • Backup your tooling blueprints and make sure they are readily available in case of a theft.

Review your security

  • Check your existing physical security and ensure you have adequate electronic security in place for maximum security.                                    
  • Assess internal and external security lighting and improve the quality and coverage if necessary.                                                
  • If you do have an alarm system in operation make sure it extends to cover the tooling store. Tools should be kept in cabinets in secure areas with a separate lockable entrance and a 5 lever mortice deadlock.
  • Check your locking systems for windows and doors:
  • Key operated window locks are not sufficient enough and windows should be barred or grilled.
  • Fit good quality close shackle padlocks together with manufacturer’s matching locking bars to folding, sliding and roller shutter doors.
  • Ensure that the panic-release bolt-work on fire exit doors is maintained in good condition and that the securing bolts engage fully when the doors are closed.
  • Additionally protect all outward-opening external doors with hinge bolts.
  • Check on a regular basis that all locking devices throughout the premises are in good working order.
  • Fit substantial boarding to protect vulnerable glazing in windows, doors, skylights and other openings
  • If the site has the benefit of a perimeter fence, ensure that the fence is maintained in good condition. Where the site does not have a perimeter fence but would benefit from one, protect the boundary of the site with security fencing to either BS1722 part 10 (chain-link and welded mesh) or part 12 (steel palisade). Ensure that site gates are of adequate quality and height to that of the site fence.
  • Consider security-marking metals such as lead on roofs. A range of products are available for this purpose e.g. DNA+

Protect your roofs

  • To prevent theft of lead from roofs, consider restricting access to roofs by installing anti-climb paint to drain pipes and roof guttering. This paint should not be installed below 2.4 metres and warning notices highlighting its use should be prominently displayed.       
  • Carry out regular checks on roofs to ensure that any theft of roofing materials is discovered quickly in order to minimise the risk of subsequent damage by rainwater ingress.
  • Do not leave ladders or other equipment lying around that could be used to gain access to roofs. This is particularly important when building works are taking place. Ensure that access to scaffolding is removed when work ends for the day.

I would also advise businesses to talk to their local community and to the police and find out if there has been any theft of metal in their areas. Lastly, make sure you have adequate insurance to cover you and your business.  Local insurance brokers are best able to advise on the most suitable cover for the requirements of individual businesses.

At MMA we have produced a short guide for businesses which is available to insurance brokers for distribution to their commercial clients. This can be obtained by emailing [email protected]