If you have worked insurance restoration long enough, you have heard the phrase "10 and 10" — 10% overhead and 10% profit, known together as O&P. It is one of the most argued-over line items on a roofing claim. Carriers sometimes include it without being asked, sometimes deny it outright, and sometimes include a reduced version. Understanding exactly what O&P is and when it is owed puts you in a much stronger position to collect it.
What O&P actually is
Overhead and profit is a markup that accounts for the costs of running a general contracting operation: insurance, licensing, administrative staff, vehicles, tools, and the risk and coordination that come with managing a complex job. It is not a reward for doing the work — it is compensation for the business infrastructure required to organize and supervise it.
The standard benchmark — 10% overhead and 10% profit, applied to the total direct costs — is the figure Xactimate uses as its built-in default when O&P is triggered. Some carriers fight the rate; others accept it. Either way, 10+10 is the industry-recognized starting point.
When carriers are supposed to include it
Courts and insurance departments in most states have held that O&P is owed when the scope of work is complex enough to require general contractor coordination across multiple trades. For roofing claims this typically means:
- The job involves more than one trade — for example a roofing contractor plus a gutter sub, an electrician, or an HVAC tech
- Code upgrades require a permit and inspections, adding coordination overhead
- The property requires a project manager on site rather than a simple one-crew job
- The insurer's own scope already includes line items from multiple trade categories
A straight single-trade shingle replacement on a simple ranch house is a harder argument. A hail claim that touches roofing, gutters, siding, a sky-light, and interior ceiling damage is a straightforward O&P claim.
How to spot O&P — or its absence — in an Xactimate scope
In an Xactimate scope, O&P appears on the summary page as separate line items: "Overhead" and "Profit," each expressed as a percentage of the subtotal. If they are not there, the summary will still show a grand total — it will just be lower than it should be. The body of the estimate does not show you this; you have to go to the summary.
That is one reason converting the scope to a spreadsheet is so useful. Once every line and the summary totals are in a spreadsheet, you can check whether O&P was applied, at what rate, and on which line items — without scrolling back and forth through the PDF.
How to request O&P if it was left off
- Document the number of trades the job involves — list each sub and their scope
- Pull the relevant state insurance code or published guidance on O&P (many states have bulletins)
- Submit a written supplement specifically requesting O&P, citing the multi-trade complexity
- Attach your subcontractor quotes or contracts to show you are actually coordinating multiple parties
- Be prepared to escalate to the department of insurance if the carrier refuses a legitimate multi-trade claim
Common carrier objections — and the answers
Carriers sometimes argue the roofer is a specialty contractor, not a general contractor, and therefore O&P does not apply. The counter: O&P is about job complexity and coordination, not license type. If you are managing multiple trades, you are functioning as a general contractor for that project, regardless of what your license says.
Another objection is that you did not use subs — you self-performed everything. The answer is that overhead and profit also compensates for business operating costs, not just sub-coordination, and both components are owed on complex work.