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Calculate the 10/10 overhead and profit markup on an insurance restoration estimate and check three-trade rule eligibility.
The total estimate amount before overhead and profit
Count each distinct trade: roofing, siding, gutters, drywall, painting, etc.
Estimate Subtotal
$15,000.00
10% Overhead
General contractor operating costs
$1,500.00
10% Profit
General contractor profit margin
$1,500.00
Combined O&P
20% of estimate subtotal
$3,000.00
Total with O&P
Subtotal + overhead + profit
$18,000.00
Three-Trade Rule: Met (3 trades)
This job involves three or more trades, which supports the inclusion of general contractor overhead and profit in the estimate.
The 10/10 O&P calculation is the industry standard, but carrier policies and state regulations vary. Some carriers apply O&P differently or require specific documentation. Always refer to the policy and your state's guidelines.
Overhead covers the general contractor's operating expenses: office costs, insurance, vehicle expenses, project supervision, and administrative time. The 10% figure is the standard used in Xactimate and accepted by most carriers. Learn more about O&P
Profit is the general contractor's margin for managing the project, coordinating subcontractors, and assuming the risk and liability of the repair work. Like overhead, 10% is the industry standard in Xactimate.
The three-trade rule is an industry guideline (not a law) stating that when a repair involves three or more distinct trades, the complexity justifies a general contractor's involvement and therefore O&P. Carriers often use this as the threshold for including O&P on a claim. Learn more about the three-trade rule
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