Overhead and Profit (O&P)
Also called: O&P, contractor overhead and profit, 10 and 10, general contractor overhead
Homeland Public Adjusters · Last reviewed: October 2026
Overhead and profit (O&P) is the general contractor’s charge for running the job: overhead is the cost of doing business (office, insurance, supervision, permits), and profit is the margin. It is commonly estimated at 10% overhead plus 10% profit (“10 and 10”) on top of the trade costs, and it is owed on any repair that reasonably requires a general contractor to coordinate multiple trades.
Where O&P shows up
Estimating software like Xactimate prices each trade (roofing, drywall, paint, electrical, flooring) at the subcontractor’s cost. When a loss involves several of those trades, a general contractor has to sequence them, pull permits, supervise and warrant the work. That coordination is not in the trade line items; it is added as a percentage at the bottom of the estimate. Carriers that leave it off are pricing the job as if the homeowner will act as their own general contractor.
When it is owed
The common test, used by many carriers and courts, is whether the repair reasonably requires the services of a general contractor, typically read as three or more trades, or work that needs permits and coordination. A roof-only claim may not qualify; a water loss that touches plumbing, drywall, paint, flooring, cabinets and electrical does. O&P is part of replacement cost: if the policy pays RCV, the question is whether a GC is reasonably needed, not whether you have hired one yet.
Florida
Florida has no statute that names O&P. The payment order in §627.7011(3) applies: the insurer pays ACV first and the rest as work is performed. Many Florida carriers treat O&P as part of the holdback and pay it only after you present a general contractor’s invoice; others pay it up front when the scope plainly requires a GC. Either way it is owed on a multi-trade repair, and it is calculated on the full repair cost, including the code-upgrade work paid under ordinance or law coverage.
New Jersey
New Jersey likewise has no statute; the policy’s replacement-cost language and the reasonable-necessity test control. New Jersey carriers commonly withhold O&P until repairs are complete. N.J.A.C. 11:2-17.7 requires written explanation of any delay, so a request for O&P that goes unanswered can be pressed under the regulation.
How carriers use it against you
- Omitting O&P from the estimate entirely on a multi-trade loss.
- Paying O&P only on some trades, or only on labor.
- Withholding it as “non-recoverable” when no GC is hired, even though the policy pays replacement cost and the work was done.
- Applying O&P after the deductible instead of before, which understates the total.
Worked example
Trades: roofing $18,000, drywall and insulation $7,400, paint $4,200, flooring $9,600, electrical $2,100, cabinets $6,300 = $47,600. O&P at 10% + 10% = $9,520. Replacement cost $57,120. If the carrier’s estimate stops at $47,600, the owner is being asked to manage six trades for free.
Frequently asked questions
Do I have to hire a general contractor to get O&P?
Is O&P always 20%?
Is O&P applied to the deductible?
Does O&P apply to contents?
Related terms
Recoverable depreciation is the money your insurer withholds from a replacement-cost claim payment until you repair or replace the damaged property.
Replacement cost value (RCV) is what it costs to repair or replace damaged property with new materials of like kind and quality today.
Ordinance or law coverage pays the increased cost of repairing or rebuilding damaged property to comply with current building codes, including demolition of undamaged portions that code requires you…
A supplemental claim is a claim for additional loss or damage from the same peril the insurer has already adjusted, or for costs incurred while repairing under an open claim.
If this is your loss, call Homeland before you talk to the insurance company: Florida (305) 783-3777, New Jersey (732) 517-3777, 24 hours. A licensed public adjuster reviews the claim for free and calls you back right away. No Recovery, No Fee.
Sources
This article is for general information only and is not legal or insurance advice. Statutes, regulations and policy wording change, and how they apply depends on your own policy and the facts of your claim. Homeland Public Adjusters is a public adjusting firm, not a law firm.
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