Trade Groups
Trade groups are the classification system in Xactimate that organizes work by the type of trade performing it (roofing, siding, plumbing, electrical, painting, etc.). The number of trade groups assigned to an estimate directly determines O&P eligibility via the three-trade rule.
The Classification System That Controls O&P
Trade groups are Xactimate's classification system for organizing work by the type of trade performing it, and the number of trade groups assigned to an estimate directly determines whether the three-trade rule applies for O&P eligibility. Roofing, siding, plumbing, electrical, painting - each gets its own trade group. This is not organizational housekeeping. The number of trade groups on an estimate directly determines whether the three-trade rule applies for O&P. Three or more trade groups equals three or more trades equals 20% markup. Get the grouping wrong and you hand the carrier a reason to deny O&P.
Trade Groups vs. Categories
These are two different classification systems in Xactimate, and confusing them is a common mistake.
| Trade Groups | Categories | |
|---|---|---|
| Purpose | Classify by trade performing the work | Organize line items within Xactimate structure |
| Examples | Roofing, plumbing, electrical, painting | RFG, PLM, ELC, PNT |
| O&P relevance | Directly tied to three-trade rule | Not directly relevant |
| Who assigns them | Estimator building the scope | Auto-assigned by line item selection |
Categories are Xactimate's internal organization. Trade groups are the O&P-relevant classification. When a carrier argues "there are only two trades on this job," they are looking at trade groups, not categories. Make sure your trade groups accurately reflect every distinct trade on the job.
How to Assign Trade Groups Correctly
Every distinct trade on the job gets its own trade group - no bundling. The most common mistake contractors make is lumping related work under one trade group. Gutters under roofing. Painting under siding. Pipe boot replacement under roofing instead of plumbing. Each time you bundle a distinct trade under another group, you reduce your trade count and weaken your O&P argument.
Review every line item on your estimate and verify it is assigned to the correct trade group. If you are replacing gutters, that is a separate trade group from roofing. If you are painting fascia, that is a separate trade group from siding. If you are replacing a pipe boot, that goes under plumbing, not roofing.
The Revenue Impact of Proper Trade Grouping
Proper trade group assignment is the difference between getting O&P and losing it. On a $25,000 storm damage claim:
- With O&P (3+ trade groups): $25,000 + $5,000 O&P = $30,000
- Without O&P (trades bundled): $25,000
That $5,000 difference is not a bonus - it is legitimate overhead and profit for managing a multi-trade project. The carrier will not assign your trade groups correctly for you. That is your responsibility in the supplement. Get it right before you submit.
Frequently asked questions
The number of trade groups on an estimate is directly tied to the O&P argument. Three or more trade groups = three or more trades = the three-trade rule applies. Make sure each distinct trade is properly assigned to its own trade group in Xactimate, not bundled under one.
Trade groups classify work by the type of trade performing it (roofing, plumbing, electrical). Categories organize line items within Xactimate's structure (RFG, EXT, PLM). Trade groups are the O&P-relevant classification; categories are the organizational structure.
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