Key Points Page
- Overhead & Profit1
- Understanding of the Role of the General Contractor2
- Some Examples of Overhead Expenses2
- Majority View: Payment Required if Use is Likely3
- Minority View: Payment Not Required Unless Incurred4
- State Insurance Commissioner Rulings5
- Industry Custom and Practice5
- Why GCO&P Always Should Be Included6
Overhead and Profit: Its Place in a Property Insurance Claim
The inclusion of General Contractor Overhead & Profit in property damage insurance claims is traditional. Numerous courts of law, the Texas and Colorado Departments of Insurance and widely-accepted insurance publications all clearly recognize the need to include these expenses in situations where the policyholder is likely to incur such costs in repairing or replacing their damaged property.
Every general contractor is entitled to a profit, which is defined as the difference between the cost of goods and the price for which they are sold. Overhead & profit is expressed as a percentage of the total construction cost.