When the economy crashed in 2008, several construction projects also came to a halt—some leaving behind partially finished work that became eyesores and targets of thieves.

“The economy surely has been inhospitable to the construction market and it has been for a while now,” said Jim Conroy, vp and chief underwriting officer for Boston-based Liberty Mutual Group's construction practice. “Most of the ongoing projects that were going to stall already have and not many of those have come back to life.”

The incomplete projects have opened potential liabilities for project owners and contractors, as both must find ways to minimize their liabilities and ensure that insurance is in place should there be losses.

One risk cited by insurance industry experts is the euphemism “urban mining,” or when thieves raid dormant construction sites for copper wire, pipe and other materials they can sell to recyclers.

“With assets that are vacant, they become a target of theft,” said Charlotte Stone, Glendale, Calif.-based managing director of worldwide property practice group and executive vp for Gallagher Real Estate & Hospitality Services, a unit of Arthur J. Gallagher & Co. “We have seen a huge rise in losses with people ripping out wiring and tearing out walls to get to heating, ventilation and air conditioning systems to remove copper from them, in some cases damaging the structure itself.”

Insurance for these losses usually would be covered by the project owner's property and liability policies. However, contractors could find themselves exposed if the owner becomes financially strapped and the owner's insurance is canceled.

This makes risk management of the building all the more critical, Mr. Conroy said.

“You're going to want to protect your assets when you leave a site,” he said. “There is a public liability exposure because a stalled project is something of an attractive nuisance for thieves and other nefarious acts.”

Protecting assets includes fencing off the site as well as installing lighting as a deterrent. If removing equipment isn't possible, contractors should make sure it is secured and, if possible, within the fenced-in perimeter, Mr. Conroy said.

Some insurers may void coverage on an abandoned project if protections have not been installed and a claim occurs, said Martha Bane, Glendale, Calif.-based area senior vp for Gallagher Real Estate & Hospitality Services.

Industry experts say other steps that also should be taken when leaving a site include removing signs with the contractor's or project owner's names to protect their reputation and shoring up the existing structure to ensure its structural safety.

“When you leave a site, you're going to have to take a good look at the structure as it exists and decide if it is safe to leave it as is or if work is going to be necessary to make it safer, or you might have to deconstruct a little bit in some cases,” said Michael Hastings, Atlanta-based national project insurance practice leader for Marsh Inc.'s national construction practice.