Overhead and Profit on an Insurance Claim: When You Get It and How to Ask

Overhead and profit on an insurance claim is an additional 10 percent for overhead and 10 percent for profit, added on top of the trade costs in a repair estimate. Carriers generally owe it when a job is complex enough to need a general contractor to coordinate separate trades, not when it is a single-trade repair.

By Jordan Bazemore. Last updated October 16, 2026.

Key takeaways

• O&P is compensation for coordination, not an extra markup you tack on because the job was hard.
• The common industry test is three or more trades, though it is a guideline carriers apply unevenly, not a law.
• A dropped O&P line is usually a default setting, not a decision somebody made about your specific job.
• Documentation wins these: list the trades, name the coordination work, and ask in writing.

What is overhead and profit on an insurance claim?

Overhead and profit is the money a general contractor earns for running a job rather than physically performing it. Overhead covers the cost of being in business at all. Profit is the return for carrying the risk. On a property claim it typically appears as two separate 10 percent lines applied to the trade subtotal.

Overhead is your office, your insurance, your truck payments, your phone, the person answering it. Profit is what is left after everything including your own pay. They are separate for a reason, and an estimate that includes one but not the other is not complete. When somebody says "ten and ten" on a roofing claim, this is what they mean.

When does an insurance company owe overhead and profit?

Most carriers apply a complexity test. If the repair requires a general contractor to schedule, sequence and supervise multiple trades, O&P is owed. If a single crew shows up and does one thing, it usually is not. The widely used threshold is three or more trades involved in the repair.

The three-trade rule gets treated like scripture and it is not. It is an industry convention that carriers apply with a lot of variation, and some state insurance departments have pushed back on rigid application of it. What actually decides the question is whether coordination work genuinely exists on your job. A tear-off with a gutter swap and interior drywall repair involves real sequencing. A shingle repair does not.

How many trades does a roof replacement actually involve?

More than contractors give themselves credit for. A full replacement on a storm claim routinely pulls in roofing, gutters, and at least one interior trade once water got in. Detached structures, siding, HVAC units damaged by hail and solar disconnects push it further. Count honestly before you decide you do not qualify.

Example: a claim with a tear-off, gutter replacement and interior drywall repair is three trades. If the trade subtotal is $18,000, O&P at 10 and 10 adds $1,800 and then $1,980, because the profit line calculates on the subtotal plus overhead. That is $3,780 on one file.

Why did the adjuster remove overhead and profit from my estimate?

Usually nobody removed it. Estimating platforms let a carrier set O&P off by default, so the line never appeared in the first place. The adjuster who wrote your estimate may not have made a judgment about your job at all, and in my experience they often add it back without much argument when you ask.

I have sat across from adjusters who flipped it on the same afternoon I pointed at the trade list. I have also had files where it took two rounds and a supplement. The thing that moves it is never frustration, it is paperwork. An email that names six trades and describes who sequences them is a different conversation than a phone call where you say the estimate is too low.

How do I document an overhead and profit request?

Write it as a short factual request, attach the evidence, and put a number on it. You are not arguing about fairness. You are showing that coordination work exists on this specific file and that the estimate is missing a standard line item.

1. List every trade by name. Not "miscellaneous interior." Write drywall, texture, paint, and say which rooms.
2. Describe the coordination. Name the sequencing problem, like interior work that cannot start until the roof is dried in.
3. Attach the photo documentation that supports each trade, tied to the elevation or room it came from.
4. State the request plainly. Ask for 10 percent overhead and 10 percent profit applied to the trade subtotal, and show the math.
5. Keep it in writing. Phone calls do not create a record you can escalate.

How TradeForge handles this

TradeForge reads the carrier estimate, pulls the trade list out of it, and drafts the supplement response with the relevant manufacturer specs and state code cited inline. The photo documentation attaches to the claim with the damage already located in each image, so the trades you are claiming have evidence sitting next to them.

It writes the request. You read it, change what you want, and send it. The Insurance Pack is $49 a month on top of a plan. There is a 14-day trial and it does not ask for a card. You can read what it does on the page for roofing contractors or start a trial.

Frequently asked questions

Is overhead and profit the same as a contractor markup?
No. Markup is what you add to materials or labor to reach your sell price. Overhead and profit on a claim is a separate line compensating general contractor coordination across trades, calculated on the trade subtotal.

Can a homeowner collect O&P if they do the work themselves?
Generally no. O&P compensates general contractor services. A homeowner acting as their own GC is a case-by-case argument with the carrier and depends on the policy language and the state.

Does O&P apply to actual cash value or replacement cost?
It is part of the estimate, so it appears in the replacement cost total and is subject to the same depreciation and deductible math as the rest of the file.

What if the adjuster refuses after I document it?
Escalate in writing to a desk adjuster or supervisor, and keep the trade list and photos attached to every message so the file carries its own evidence.

Count your trades before you accept an estimate. Most of the money contractors leave on these files is money nobody ever asked for.