Overhead and Profit is now Officially Fair Game for General Contractors

The dispute about whether general contractors are entitled to compensation from insurance companies for overhead and profit charges is now officially over.  In an opinion published by the Supreme Court of Florida on July 3, 2013, Trinidad v. Florida Peninsula Ins. Co., 38 Fla. L. Weekly Supp. 507 (Fla. 2013), the Court held general contractors ARE entitled to such charges under a replacement cost homeowner’s policy.  Specifically, the ruling held that homeowners are entitled to payment for overhead and profit when the insured (homeowner) is reasonably likely to need a general contractor.

The Court reasoned that overhead and profit are a necessary component of replacement cost policies since the policy is expressly intended to compensate a homeowner for the cost to replace the damaged property.  Moreover, the Trinidad holding specifically overruled Second District Court of Appeals opinion that had previously held that general contractors were only entitled to payment for overhead and profit when the homeowner had actually incurred such charges or where reasonably likely to incur such charges.The ruling in Trinidad is a step in the right direction. However, there is a still an enormous amount of work to do in order to keep the momentum moving in the proper direction. Please feel free to contact our office if you have any specific questions about the impact or application of this ruling.

Article Written By: Paul T. Zeniewicz, Esquire

 

Attorney at: Cohen Battisti, Attorneys at Law

Paul T. Zeniewicz, Esquire is an attorney at Cohen Battisti.  His practice primarily focuses on first party insurance claims. 

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4 thoughts on “Overhead and Profit is now Officially Fair Game for General Contractors

  1. I have hail damage claim with roof, gutter, siding/painting, garage door, fencing trades but Safeco still refused to include/pay GCO&P in ACV under a replacement cost homeowner’s policy. Safeco’s adjusters told me only the general contractor is entitled to payment for overhead and profit only after the the general contractor is hired and submit the proofs that the hired general contractor used the sub-contractors. I am wondering whether Safeco’s adjusters are misleading me or mispersenting the GCO&P or play in “bad faith”?

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