Estimate Mastery, The Podcast Episode 9 - How to get O&P paid on your supplements!
Sep 19, 2022
Todd Beckman, an Exactware certified trainer, shares his expertise on securing Overhead and Profit (O&P) payments from insurance carriers for contractors. He breaks down the significance of overhead costs and discusses transparent methods to justify them. Todd explores the delicate dance between contractors and insurance adjusters, emphasizing communication with homeowners to advocate for fair compensation. He also highlights the importance of certification in enhancing claim handling, equipping contractors with essential strategies for success in the restoration industry.
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Understanding Overhead and Profit
- Overhead and profit (O&P) consist of general administrative costs and direct job-related expenses necessary for running a business.
- Xactware recognizes that subcontractor items include overhead but general contractors are entitled to additional O&P costs.
Clarifying Overhead vs Profit
- Overhead varies widely depending on company size from a two-truck operation to multi-office companies.
- Profit does not include owner's salary, which should be allocated under overhead costs.
General Contractors' O&P Justified
- General contractors who subcontract multiple trades incur unique liabilities and coordination responsibilities.
- This justifies their entitlement to overhead and profit beyond subcontractor O&P, especially in high-demand sectors like roofing.