If you've spent any time supplementing roofing claims, you've run into this fight. The carrier writes O&P at 10%. You know it should be 20/10. They push back. The claim stalls.
Overhead and profit is one of the most consistently argued line items in residential roofing claims, and understanding exactly why carriers resist it — and how to counter that professionally — is worth real money on every job.
What Overhead and Profit Actually Means
O&P in Xactimate refers to the general contractor's overhead and profit markup applied on top of direct repair costs. Overhead covers the indirect costs of running a business: insurance, vehicles, office staff, equipment, licensing, and everything else that doesn't show up as a direct line item on a job. Profit is the margin the contractor earns for managing the project.
The standard in Xactimate is 20% overhead and 10% profit, often written as 20/10. This is built into Xactimate's pricing assumptions as the default for general contractor work.
Worth Noting
20/10 is the widely recognized industry standard for general contractor overhead and profit in Xactimate-based estimates, and many regional pricing guides reflect this expectation. Carriers who write 10% are deviating from what most contractors and adjusters consider the norm.
Why Carriers Default to 10%
Carriers often write O&P at 10% or apply it only partially, sometimes arguing that the work doesn't require a general contractor or that the scope isn't complex enough to justify the full rate. Some simply default low and wait to see if anyone pushes back.
On a $15,000 claim, the difference between 10% O&P and 20/10 can easily exceed $1,000. Across a year of claims, that's a substantial amount of revenue left uncollected.
How to Justify the Correct Rate
The most effective approach is documentation. Pull the Xactimate regional pricing data that supports 20/10 for your market. Include it in your supplement submission with a direct citation. Explain the scope elements that require general contractor coordination: permitting, multiple subcontractors, inspections, material sourcing, timeline management.
If the claim involves code upgrades, multiple trades, or storm damage affecting multiple systems, that strengthens the case. The more you can show that the job requires active general contractor management, the harder it is for the carrier to deny the full rate.
One thing to be prepared for: some carriers will argue that O&P doesn't apply if the roofing contractor is self-performing all the work. If that objection comes up, be ready to document the GC coordination role — permitting, inspections, subcontractor oversight — that exists regardless of who swings the hammer.
Keeping It Professional
The tone of a supplement matters. Carriers review a high volume of submissions. A professional, factual justification that cites sources moves faster than a confrontational one.
Reference Xactimate documentation. Reference regional pricing. Keep the language direct and focused on the scope. Avoid anything that reads as an argument. You're presenting evidence, not making a case in court.