Overhead & Profit (O&P) in Claims
An added percentage, commonly around 20%, often split evenly between overhead and profit, that insurers include in a scope of loss when a repair is complex enough to require a [[concept-general-contractor|general contractor]] to coordinate multiple trades, compensating for the GC's management costs and profit separately from the materials and labor line items themselves.
Why it matters
Whether O&P belongs in a scope of loss isn't automatic: industry guidelines generally tie it to how many separate trades a repair requires, so a claim involving three or more trades typically should include it, and insurers sometimes omit it initially, leaving the policyholder or their public adjuster to argue for its inclusion.
On a real project
A fire damage repair requiring a roofer, an electrician, and a drywall crew working together is scoped with O&P included, since coordinating three separate trades on one project is exactly the kind of general contracting work O&P is meant to compensate.
Who this matters most to
A Public Adjuster argues for O&P to be added when an insurer's initial scope omits it on a multi-trade loss. An Insurance Restoration Estimator includes O&P in the estimate whenever the repair genuinely requires coordinating several trades, citing industry guidelines to support it.
Where this goes wrong
An insurer's initial scope for a multi-trade fire repair omits O&P, assuming the homeowner will simply hire and coordinate each trade separately. A public adjuster points out that no reasonable contractor would take on a project requiring three coordinated trades without general contracting compensation, and the insurer adds O&P back into the settlement after review.