Insurance Overhead and ProfitHave you heard your roofing company or a general contractor talk about O&P? Or perhaps you’ve been involved in an insurance claim where it was denied, and you helped get it resolved. O&P stands for “Overhead and Profit”. In the context of roofing and exterior services, it refers to the money paid as part of your claim to cover the project management and overhead involved in managing the overall project.

What O&P covers

Professional companies, like Peak Roofing & Construction, want every project to go smoothly for the homeowner or business owner. The back-end coordination of multiple trades and scheduling should magically happen for you. O&P is the portion of the project budget that enables contractors to provide that level of customer service to you. For example, instead of asking you to be the liaison between the repair company and your insurance company each time an amendment needs to be submitted, the contractor does it for you.

Who decides if O&P is included?

The Texas Department of Insurance provides guidance of what should legally be covered as they are the governing body for the insurance industry in Texas. However, the individual insurance companies determine if they deem project management necessary. Insurance companies get their information from the insurance adjuster who does the inspection on the home or business. When it does not automatically get included, it is up to the service provider or property owner to provide justification for adding it to the claim.

“Your team was so helpful. When we had trouble with our insurance claim, you provided the photos and information they needed to eventually approve it. Our project manager was so knowledgeable. I’m glad we had you on our side.”

Jana B.

Frisco, Texas

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The backstory

Most reputable insurance companies understand the complexity of project management and are willing to pay for it. However, unfortunately, they do have a valid reason to question it as well. Unfortunately, Texas does not require roofing companies and many trades to be licensed. As a result, we have more than our share of unscrupulous companies making false claims in Dallas, Fort Worth, and Houston. These fly-by-night companies abused the system and, as a result, caused insurance companies to be more stringent in evaluating what they agree to cover.

What if my O&P claim is denied

The first step is to talk with your insurance and try to understand why it was denied. Your contractor can assist you in this process. Sometimes it simply requires providing missing information or submitting additional photos. If this doesn’t work you can appeal the decision. The rarely needed but final option is hiring an insurance dispute attorney to pursue the case.

Note: Peak Roofing & Construction provides this information based on over a decade of experience working with insurance companies and is not claiming to be legal experts on the topic.