DFI staff tried to complete the work on the roundabout kerb on outskirts of the town in Co Derry on Wednesday evening.
Police officers attended after reports that a loyalist mob had gathered.
In recent weeks numerous incidents have increased community tensions in the town.
UDA and UFF slogans were daubed on St Mary’s Chapel in the town and black paint over a statue of the Crucifixion in the grounds of the Catholic Church.
On Sunday, a number of kerbs and a wall on the Ballyquin Road were painted green, white and orange.
Local SDLP Councillor John Deighan told the Irish News a minority in the community was doing “tit-for-tat graffiti and daubing of walls”.
DUP councillor Aaron Callan told the paper that intimidating officials “going about their business…is wrong”.
In a statement, the (PSNI) said they received reports on Wednesday evening that a crowd, “including individuals with ladders,” had gathered close to where work was being carried out on the roundabout.
Chief Inspector Mark McClarence added: “We are aware of a number of issues that have occurred in Limavady of late that are causing concern among residents.”
He also appealed to those with influence in the community to “continue talking to each other” in order to “reduce tensions in the town”.