Insurance restoration contractors and public adjusters often complain that many insurance companies will instruct their field adjusters to do just about anything to exclude paying general contractor overhead and profit. Jacob Krahl, managing director of Elite Consulting Pro, has had so many contractors he consults with complain about this unique issue he is sponsoring an Overhead and Profit Workshop for restoration contractors in Dallas on October 1.

Many insurers are now telling field adjusters to withhold general contractor overhead and profit until it is incurred. Even insurance company attorney Barry Zalma has indicated this is wrong and that overhead and profit is a necessary item to be included not only in replacement cost calculations, but in actual cash value calculations:

There is no basis for simply withholding profit and overhead as a means of calculating actual cash value. In fact, modern insurance policies that actually provide a definition for actual cash value define it as (1) replacement cost less physical depreciation, (2) replacement cost less betterment, (3) fair market value, or (4) a combination of the various definitions. When there is no policy definition, courts will apply one or more of the four definitions above.1

I will be giving a presentation at this conference and providing attendees a country wide analysis of cases, regulations, and insurance industry references which indicate the tests for determining when overhead and profit is owed. I will also share ten tips to help prove that overhead and profit costs should be included within insurance restoration estimates.

Overhead and profit cases are plentiful because of insurance company claims initiatives. Accordingly, these claims denials are often ripe for class action status because insurers often use the same wrongful techniques in all property cases which delay or deny overhead and profit benefits to policyholders and their contractors.

Hope to see you in Dallas. Here is the link for registration.

Yogi Bera Thought For The Day

"You should always go to other people’s funerals; otherwise, they won’t come to yours."

1 Barry Zalma, Representing Insureds in a Catastrophe, 41 Tort Trial & Ins. Prac. L.J. 817, 840 (2006).