Overhead and Profit on Roofing Claims: When You Can Charge O&P

Overhead covers the general contractor's cost of running a job: coordinating trades, scheduling, supervising, insurance, office staff and similar business costs. Profit is the margin for taking on the risk of the project. In an insurance estimate, both are usually added as percentages on top of the direct costs of labor and materials.

O&P matters because it can be a meaningful part of a claim, and because it is one of the items carriers most often question. Getting it right starts with understanding when it applies.

O&P is most often requested when a repair needs a general contractor to coordinate several trades. A roof replacement that also needs gutters, siding, paint, drywall or electrical work is a typical example.

It is commonly discussed as a 10 percent overhead and 10 percent profit combination, but that figure is a convention and not a rule. The right amount for your claim depends on the policy, the carrier and your state. A single-trade roof replacement with no coordination is much harder to justify.

Carriers push back on O&P for predictable reasons. The comparison below shows what raises questions and what makes a request easier to support.

A good O&P request does four things: it lists the trades involved, it shows why a general contractor is needed to coordinate them, it ties the request to policy language, and it stays consistent with how you priced the rest of the job.

Treat O&P like any other line item: it needs proof.

Keep your tone factual. Carriers respond better to organized support than to demands.

A few habits make O&P harder to win.

When you document the full scope well, as covered in our guide on writing an Xactimate roofing estimate that gets approved, O&P becomes part of a professional package instead of an afterthought.