No line item starts more fights than overhead and profit. Half the industry insists O&P belongs on every claim and treats a denial as theft. Carriers, for their part, would prefer it appeared on none. Both positions are wrong, and the roofers stuck between them mostly just want a straight answer: when is overhead and profit actually owed on a roofing claim?
Here’s the straight answer, from someone who denied O&P requests for a living before switching sides: it’s owed when the job genuinely needs a general contractor — someone coordinating multiple trades — and it isn’t when it doesn’t. That’s the standard most courts apply, it’s the standard most carriers will ultimately pay on, and it’s the standard we use when deciding whether to request it on a file. Everything else in this article hangs off that one test.
What Overhead and Profit Actually Covers
First, clear up the confusion that poisons most O&P arguments. The “10 and 10” — typically 10% overhead and 10% profit added on top of the estimate — is general contractor overhead and profit. It compensates for the GC function: scheduling trades, supervising the site, sequencing the work, carrying the administrative load of a multi-trade project.
It is not your roofing company’s overhead. Your office rent, your insurance, your salespeople, your margin — all of that is already built into Xactimate’s unit pricing. Every line item on the estimate carries labor, material, and market-rate contractor overhead within it. When a carrier says “your overhead is in the line items,” they’re correct about that overhead.
So the O&P question is never “does this roofer have expenses?” Every business does. The question is: does this loss require somebody to perform the general contracting function? Keep the two concepts separate and half the usual argument evaporates.
When Overhead and Profit Is Owed
The standard that’s emerged across most of the country: O&P is payable when the insured is reasonably likely to need a general contractor to complete the repairs. The Florida Supreme Court put its weight behind that test in Trinidad v. Florida Peninsula (2013), and it reflects the majority view courts have taken — the trigger is the likely need for a GC, based on the complexity of the loss.
In practice, that need shows up as trade coordination. Think about a real hail loss: roofing, siding, gutters, window screens, painting, maybe interior drywall from a leak, a fence. Those trades have to happen in the right order, on a schedule, with someone accountable for the whole. That’s general contracting, and whoever performs it — often the roofer acting as GC — has earned the 10 and 10.
You’ve probably heard the “three trades rule”: three or more trades means O&P. It’s a decent shorthand and a lousy standard. Two trades with genuine sequencing complexity can warrant a GC; four trivial trades knocked out in an afternoon might not. Carriers know the difference, and so do we. The honest test isn’t counting trades — it’s whether the job falls apart without someone coordinating it.
When Overhead and Profit Isn’t Owed
Now the part of this article you won’t find on most supplement company blogs: a roof-only replacement, performed by a roofing company doing what roofing companies do, generally does not warrant general contractor overhead and profit. One trade. Your crew. Your normal supervision, already priced into the line items. There’s no GC function being performed because there’s nothing to generally contract.
Can you demand it anyway? Sure. Here’s what it costs you. Adjusters keep mental (and sometimes literal) lists of who requests O&P on every file regardless of scope. Once you’re on that list, everything you submit gets read skeptically — including the code items and missed scope you were dead right about. You traded your credibility on a hundred future files for a line item you were going to lose anyway.
We request overhead and profit when the file supports it and skip it when it doesn’t, and that discipline is a big part of why our supplements close in about three weeks instead of aging into the reinspection queue. The fastest way through a carrier’s review process is a track record of only asking for what’s owed.
The State-by-State Wrinkle
O&P law is genuinely messy across jurisdictions, and you should know the shape of the mess without pretending to be a lawyer about it.
Florida’s Trinidad decision anchors the “reasonably likely to need a GC” standard. Colorado’s Division of Insurance Bulletin B-5.1 is frequently waved around in O&P fights, but read what it actually addresses: it prohibits deducting contractor O&P in addition to depreciation when calculating actual cash value — it’s an ACV holdback rule, not a mandate that O&P be paid on every claim. Citing it for the wrong proposition is a credibility-burner. Other states land elsewhere on when O&P enters the ACV payment versus the recoverable depreciation.
The practical takeaway: know your state’s posture before the fight starts. Matthiesen, Wickert & Lehrer maintains a 50-state chart on general contractor overhead and profit, and Adjusters International’s Adjusting Today issue on overhead and profit walks the doctrine in depth. Bookmark both — and when a specific claim turns on a legal question, that’s the homeowner’s conversation to have with a licensed professional, not something a roofer or a supplement company should be resolving on their behalf.
How to Request Overhead and Profit So It Gets Approved
When the file does support O&P, the request wins or dies on documentation — same as roofing code items, same as everything else in this process. Adding two 10% lines to the estimate and hoping is not a strategy. The file should show:
- The trade list. Every trade the loss requires, itemized in the estimate — not summarized in a cover note.
- The coordination story. A simple sequencing schedule: what happens in what order, and why the order matters (siding after roofing, paint after siding, interior after the roof is dried in).
- Who’s performing the GC role. The contract should reflect that your company is general contracting the loss — supervising and scheduling the non-roofing trades, not just referring them.
- The ask, stated once, in writing. Put it in the supplement package with the support attached. If it comes back denied and the file is strong, escalate with the structure from our clean rebuttal guide — restate the coordination facts and ask which of them the carrier disputes.
Notice what’s absent: policy arguments, statute-waving, threats. On a well-documented multi-trade file, the facts do the arguing.
The Position That Wins Long-Term
Overhead and profit isn’t a bonus for asking loudly. It’s compensation for a real function — and the roofers who treat it that way get paid it more often, faster, with less friction, because carriers learn their requests mean something.
If you’re sitting on multi-trade files where O&P was never requested, or you’re not sure which of your open claims actually support it, that’s a fifteen-minute review for our team. Send us a file and we’ll tell you honestly — including when the answer is “this one doesn’t qualify.” That answer is free, and it’s the reason the other answers are worth something.
Ready to hand off your supplements? Looking for a supplemental roofing estimate on a claim like this? See how EOD’s roofing supplement services work, check our pricing (10% of the increase — no increase, no fee), or get in touch.
