Steve Patrick is a guru for those estimating property insurance losses. He made a suggestion on Level The Playing Field, for a construction book, Markup & Profit: A Contractor’s Guide, Revisited. His suggestion caught my eye since Merlin Law Group keeps this work in our reference library. This book is an excellent reference which contractors, property loss estimators, and property loss adjusters can use to help when considering reasonable construction pricing.
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Merlin Law Group previously blogged about Konrad Kurach v. Truck Insurance Exchange,1 where an appeal was recently filed at the Pennsylvania Supreme Court on this question:

Did the Superior Court err as a matter of law in finding that the limitation of payment of General Contractors Overhead and Profit from actual cash value in a replacement cost policy, although violative of binding precedent, was nonetheless valid and enforceable?
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The Colorado Department of Insurance will not be repealing its longstanding bulletin requiring that contractor overhead and profit be a part of a calculation to determine actual cash value at tomorrow’s stakeholder meeting in Denver. This is fantastic news for all Policyholders and the correct decision by those dealing with this issue in the Colorado Department of Insurance. We discussed the issue in, Colorado Overhead and Profit Issues—Merlin Law Group Files a Response for Colorado Policyholders, and noted this meeting in, How To Adjust Actual Cash Value and Overhead and Profit in Colorado—Colorado To Hold Public Forum For Comments.
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The Colorado Division of Insurance will hold a public stakeholder meeting at the Colorado Division of Insurance in Denver on May 21, 2019, regarding its proposal to eliminate one of its long-standing bulletins requiring insurance companies to pay contractor overhead and profit rather than deduct the amount until incurred.1 We discussed this in Colorado Overhead and Profit Issues—Merlin Law Group Files a Response for Colorado Policyholders.
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The Colorado Department of Insurance has proposed eliminating one of its long-standing bulletins requiring insurance companies to pay contractor overhead and profit rather than deduct the amount until incurred. Such an elimination is obviously against policyholder interests and is the result of insurance industry lobbyists making inroads with Colorado insurance regulators who are supposed to be guardians of the public interest.
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Overhead and Profit can generate a lot of debate when insurance company adjusters are looking to meet their adjustment severity goals and lower claims payments. But have you ever wondered how those same insurers instruct their sales people to calculate overhead and profit when they are calculating the premiums that they charge their customers for the same coverage?
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While many carriers continue their attempt to exclude overhead and profit from property damage claim payments made on an actual cash value basis, the majority approach across the United States has been to include general contractor overhead and profit in actual cash value payments for losses where repairs would be reasonably likely to require a

The appraisal clause in a typical residential and commercial property insurance policy provides for an appraisal if the parties disagree as to “the amount of loss.”1 That phrase has been the subject of extensive legal debate between insureds and insurers in terms of its meaning and scope. While most courts have concluded that ascertaining the amount of loss does not include interpreting the policy or making coverage determinations, little guidance has been provided as to what coverage means and whether an appraisal can still proceed even if coverage issues exist.
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