How Overhead & Profit Works on Roofing Claims: When O&P Applies and How to Get It

Overhead and Profit is one of the most contested items on insurance roofing claims. Carriers push back on it constantly. Some adjusters leave it off the estimate by default. But on any job involving three or more trades, O&P is a standard component of Xactimate pricing — and if it's not on your estimate, you should be requesting it.

What O&P actually is

Overhead and Profit represents the general contractor's cost to manage and coordinate a project. Overhead covers the indirect costs of running the job — project management, insurance, vehicles, office costs, supervision. Profit is exactly what it sounds like — the margin the GC earns for taking on the project.

In Xactimate, O&P is calculated as 10% Overhead and 10% Profit, applied to the total job cost. On a $15,000 reroof, that's $3,000 in O&P. It's not a small number, which is exactly why carriers resist including it.

When O&P applies

The industry standard is that O&P applies when three or more trades are involved in the job. The reasoning is straightforward — when a general contractor has to coordinate multiple subcontracted trades, there's real cost associated with that coordination. Scheduling, sequencing, quality control across different crews, liability management. That's what O&P compensates.

On a typical insurance reroof, the trades add up quickly. Roofing is one. If there's gutter work, that's two. Painting or touch-up, three. HVAC or AC condenser reset, four. Framing or carpentry for decking replacement, five. Drywall repair from interior water damage, six. Most full reroofs hit the three-trade threshold without trying.

Why carriers push back

Insurance companies resist O&P because it's a significant line item and because the threshold is debatable. Some carriers argue that roofing and gutters are the same trade. Others claim that trades performed by the same company don't count as separate trades. Others simply leave O&P off the estimate and hope the contractor doesn't notice or doesn't push for it.

None of these arguments hold up well. Xactimate's own pricing methodology includes O&P as a standard calculation when multiple trades are present. The trades are defined by Xactimate's trade categories, not by who performs the work. A roofing company that also does its own gutter work is still coordinating two distinct trade categories as defined by the estimating platform the carrier chose to use.

How to get O&P included

First, count the trades on your job. Review the estimate and identify every distinct Xactimate trade category represented — roofing, gutters, painting, HVAC, framing, drywall, fencing, landscaping, and so on. If you count three or more, O&P applies.

Second, if O&P isn't on the estimate, include it in your supplement. The justification is straightforward: this job involves the coordination of three or more trades, and per Xactimate pricing methodology, General Contractor Overhead (10%) and Profit (10%) are applicable when a general contractor is required to coordinate multiple subcontracted trades.

Third, list the specific trades. Don't just say "three or more trades." Name them. "This claim involves coordination of Roofing, Gutters, Painting, and HVAC — four trades requiring general contractor oversight." The specificity makes it harder for the adjuster to push back.

Fourth, know that this is a normal and expected part of the process. You're not asking for something unusual. O&P is built into Xactimate. It's a standard component of contractor compensation on multi-trade jobs. Carriers know this. Their adjusters know this. The pushback is about cost control, not about whether O&P is legitimate.

The most common mistake

The biggest mistake contractors make with O&P isn't failing to request it — it's failing to identify all the trades on the job. If your estimate has line items across four trade categories but you only noticed two, you might not request O&P at all.

Review every line item on the estimate and note the trade category. Xactimate organizes items by trade — RFG for roofing, GUT for gutters, PNT for painting, HVC for HVAC, FRM for framing, and so on. Count the distinct categories. On a complex job with interior damage, you might find six or seven trades. That's a strong O&P claim.

O&P isn't bonus money. It's compensation for real costs that general contractors incur when coordinating multi-trade projects. If your job qualifies and your estimate doesn't include it, submit for it. The math alone makes it one of the most impactful line items on any supplement.