How to Get O&P Approved on Every Roofing Claim

Overhead and profit is the most contested line item in any roofing supplement. Adjusters push back on it, carriers have internal policies against approving it, and most contractors accept the denial without a fight.

That's a mistake. On a $30,000 claim, O&P at 20% is $6,000. If you're running 20 claims a year and leaving O&P off half of them, you're walking away from $60,000 annually. That money was already in the policy — you just didn't ask correctly.

Here's the system that works.

What O&P Actually Is (And What It Isn't)

In insurance claims, overhead and profit is the markup applied on top of direct labor and material costs. The standard in Xactimate estimates is 10% overhead + 10% profit, applied as a line at the bottom of the estimate.

It is supposed to cover: your office, your admin staff, your trucks, your insurance, your software, your phone bill, your licensing fees, and your actual profit margin. It is not in the labor rate. Your crew's $45/hour is direct labor — it doesn't include the $3,000/month you spend on workers' comp insurance and the desk your estimator sits at.

The problem: 10% overhead is not realistic for most roofing businesses. The real number is usually 25% to 35%. But even setting that aside, adjusters often skip O&P entirely — especially on supplements. That's what we're fixing here.

The 3-Trade Rule: Your Strongest Argument

The three-trade rule is the most important concept for getting O&P approved. Here it is plainly:

When an insurance claim involves three or more distinct trades, the carrier must pay general contractor overhead and profit on top of the total contractor scope — because someone has to coordinate those trades, and that coordination has real costs.

This isn't a contractor invention. It's an insurance industry standard that's been upheld in disputes and acknowledged in Xactimate's own documentation. The logic is simple: if a homeowner hires a GC to manage a roofing, gutter, and siding job, that GC deserves to be paid for the coordination work. Your O&P is that GC markup.

What Counts as a Trade?

A typical hail claim — roofing, gutters, siding — is already three trades. You hit the threshold on almost every storm claim you run.

The Third Trade Contractors Miss

Here's something most contractors overlook: paint is a separate trade.

If any repair work requires painting — fascia boards, trim, soffit after replacement, interior ceilings from water damage — that's a painting trade. It doesn't matter that your crew might handle it. In the eyes of an insurance estimate, painting is a distinct trade that contributes to the three-trade threshold.

When you write your supplement, list every trade explicitly. Don't let the adjuster assume it's all one contractor doing everything. Break it out. That documentation is what gets O&P approved.

The Xactware O&P White Paper

Xactware — the company that makes Xactimate — published an official white paper explaining when and why O&P should be applied to insurance claims. The key points from that document:

• O&P is warranted when a general contractor is needed to coordinate multiple subcontractors
• The typical threshold is three or more trades requiring coordination
• O&P applies to the full scope managed by the general contractor, not just certain line items
• The 10% overhead and 10% profit percentages in Xactimate are standard industry benchmarks, not caps

When an adjuster tells you "Xactimate already includes O&P," the white paper is your rebuttal. The Xactimate estimate includes a standard O&P percentage, but whether the correct O&P was applied for a multi-trade loss is a separate question. Reference the white paper directly in your supplement letter — it signals that you've done your homework.

Exact Supplement Language to Use

This is the language that works. Copy it, edit the specifics, and send it with your supplement package.

Re: General Contractor O&P — Claim #[number] — [Property Address]

This loss involves the following trades requiring coordination and management:

• Roofing (shingles, underlayment, flashing)
• Gutters and downspouts
• Siding
• Carpentry (soffit and fascia)
• Painting (paint on replaced fascia boards)

Per the Xactware O&P White Paper and standard insurance industry practice, general contractor overhead and profit (10% overhead + 10% profit) applies when three or more trades are required to complete the scope of loss. This claim involves five distinct trades.

Requesting GC O&P at 20% applied to the total coordinated scope:

• Total multi-trade scope: $[amount]
• GC O&P at 20%: $[amount]

This represents the cost of coordinating subcontractors, sequencing work, managing access, and ensuring warranty-compliant installation across multiple trade categories. Documentation of trade scope attached.

Keep it professional. Keep it specific. List the trades, cite the standard, show the math.

When They Deny It Anyway

Some adjusters will still say no. Here's how to handle it without burning the relationship:

1. Ask for the denial in writing. Email the adjuster: "Can you provide the specific policy language or guideline that results in the O&P denial?" Most won't respond with anything useful, but the request puts them on notice that you're tracking it.
2. Escalate to a supervisor or reinspection. Request a supervisor review. Frame it as wanting to ensure the estimate is complete, not as an accusation.
3. Add it to your next supplement. If the claim isn't closed, add the O&P request again with additional documentation — a trade breakdown table, photos showing each trade's damage, and the Xactware white paper reference.
4. Know when to involve a public adjuster. For claims over $50,000 with unresolved O&P disputes, a public adjuster can be worth the 8% to 10% fee if they recover $15,000 in O&P you'd otherwise leave behind.

The contractors getting O&P approved consistently aren't using magic words. They're just more persistent and more organized than the next guy. The adjuster knows the argument — they're waiting to see if you'll fight for it.