Does Xactimate Pricing Include Overhead and Profit?

Does Xactimate pricing include overhead and profit? No, not in the way the question is usually meant. The building cost data behind the price list is “not designed to be inclusive of sales tax, general O&P, or job-related O&P within the unit prices,” says the white paper published by the company that produces it. O&P is the trade's shorthand for overhead and profit. One narrower category of overhead does sit inside every unit price, and this post names it.

The question tends to arrive in one situation. A line on a restoration estimate is reduced or struck, and the reason given is that the software's price already carries the contractor's overhead and profit, so nothing further is owed. That is a statement about how a price list is built, and it is checkable against the documents the industry publishes about itself.

Two of those documents are public. One is the white paper from the publisher of the Xactimate price list, which sets out three categories of overhead and says where each one belongs. The other is the Restoration Industry Association's first pricing position statement. Both are quoted below in their own words, so you can weigh the wording yourself.

One boundary before any of it. Restoration Doctor is a restoration contractor, not a public adjuster and not a law firm. This post reads two published industry documents and nothing more. It is not legal or insurance advice and it does not interpret anybody's policy. Your carrier decides what your coverage owes, and a licensed public adjuster or an attorney is who you ask when the dispute is about coverage.

A unit price is the published cost of one unit of one task: a square foot of drywall hung, one day of one air mover, a linear foot of baseboard installed. Each price is built from the cost of the materials and the cost of the labor for that task, and the paper sets out the labor side in detail; the data is republished monthly from market surveys, so the number moves as the surveys move.

The labor side has a structure of its own, and the publisher spells it out plainly: “Labor overhead plus expenses for labor burden and worker wage (wage paid to the individual) make up the retail labor rate.” Worker wage is what the technician is paid. Labor burden is what employing that technician costs on top of the wage. Labor overhead is the third piece, and it is the piece that decides how this question ends.

Where the price comes from matters as much as what it contains. “When the Verisk team performs market research on unit prices, those surveyed are specifically asked to not include expenses that would be included in general overhead (see below) or profit markup percentages,” the paper states. A price whose reported inputs excluded those two expenses cannot then be said to contain them. One category of overhead is a real exception to that, and it is set out further down.

A unit price is a task price. It is not a project price, and the white paper says where each project-level cost goes instead.

The document is titled Overhead and Profit: What Is and Isn't Included in Verisk Property Estimating Solutions Pricing. The paper is published by Verisk Analytics, whose Property Estimating Solutions team publishes the unit price data; Xactimate is a registered trademark of Xactware Solutions, Inc., and the earlier editions of this same paper were published under the Xactware name. The current edition carries a 2023 copyright and can be read in full as a PDF on the publisher's own site.

A word about access, because it matters to anyone checking this. Every quotation below was read out of the copy linked above, downloaded from the publisher's own domain on September 21, 2026. The paper also points readers to Verisk's eService Center for a separate white paper on retail labor rates; a request for a document at that address without a login returned an authorization error the same day, so nothing in this post relies on it.

The flat statement is on the last page of the body. “The building cost data published by Verisk is not designed to be inclusive of sales tax, general O&P, or job-related O&P within the unit prices. These can be specified and added at print time after all line items have been listed.” Those costs are added after the line items exist, which is why they surface on a summary page rather than inside any single line.

General overhead is the cost of running a contracting business at all; the paper's examples are general and administrative expenses, office rent, utilities, office supplies, salaries for office personnel, depreciation on office equipment, licenses, and advertising. It is the category most people mean by O&P. The paper is direct about where it belongs: “General overhead expenses aren't included in Verisk's unit pricing but are typically added to the estimate as a percentage of the total bid along with the appropriate profit margin. These two costs constitute what’s normally referred to in the insurance restoration industry as general contractor’s O&P, or just O&P.”

None of this is a recent change of position. Xactware Solutions published the same paper in editions dated 05.01.2011 and 02.05.2020, and both carry the identical sentence about what the building cost data is not designed to include, naming Xactware where the current edition names Verisk. The wording has survived a decade and a half.

The Restoration Industry Association released its first pricing position statement for restoration contractors under the title Deviation from Standardized Price Lists, describing it as peer-reviewed and aimed at attempts to prohibit any deviation from a standardized price list. The full text of the statement is not published on that page. The sentences quoted here come from the association's own public announcement of it, “Now Available: ‘Deviation from Standardized Price Lists’ Pricing Position Statement”, on restorationindustry.org, the only version this post relies on.

The fourth point is the one that answers this post's question. “Building cost data published by most pricing software providers is not designed to be inclusive of sales tax, general overhead and profit, or job-related overhead and profit within the unit prices,” the announcement reads. The association is explicit about where its wording came from: it says it went through pricing platform documentation to source the quotes in the statement. So this is not a second, independent measurement — it is the vendor’s own published position, restated by a trade body that expects its members to be told otherwise.

The same point carries two lines that are easy to skip. “Each contractor determines their own retail labor rate,” the announcement says, and it adds that this is not something the insurer or its partners determine. It also reports that pricing software “does not include markup on the materials component.” Who sets a rate is a different question from what a price contains, and the two get run together constantly.

The association puts its position on refusals of deviation in strong terms. Insurers who do not allow deviation from standardized prices “are not using pricing software as it is intended and are at risk of not honoring their responsibilities under the contract of insurance,” the announcement says. Read that for what it is: a trade association's position, not a rule of law and not a court's holding. Whether a particular claim was handled properly is a question about that policy and that file, and a contractor is not the person who answers it.

One category is genuinely inside the unit price, and the publisher's own term for it is job-personnel overhead. “The non-wage-related expenses associated with having a general contractor's own employees perform the work, or the total G&A expenses incurred by a subcontractor when using their services, are known as job-personnel overhead,” the paper says. G&A there is general and administrative cost. The examples the paper gives are vehicle costs, uniforms, mobile phones and depreciation on company-owned hand tools.

Where does it sit? “Job personnel overhead (or subcontractor O&P) expenses are included in the labor overhead portion of each unit price in the Verisk price list.” So when a trade's own crew performs a task, the cost of running that crew is already inside that task's price. A separate charge for the same expenses would be asking twice for one thing.

The paper then goes one step further. Job-personnel overhead “also includes the portion of G&A expenses and profit that correlate to employees performing billable tasks that aren't included in the general contractor O&P markup.” Some profit, belonging to whoever actually performs the task, is inside the unit price. That is the publisher's own language, not a concession dragged out of it.

So the honest version is narrower than the version usually argued. Anyone who tells you a price list contains no overhead and no profit at all is overstating what these documents say. What they do support is specific: the general overhead and profit of coordinating a multi-trade job is not inside the unit prices, and neither is job-related overhead or sales tax. The overhead that is inside belongs to the trade doing the task, not to the party coordinating the job.

The paper names three overhead categories and places each one. Setting them side by side shows why one sentence about what is “already in the line item” cannot answer the whole question: the answer differs by category, and a reduction that cites the wrong category is citing the wrong page.

Sales tax is in the table too, because the sentence that excludes general and job-related overhead excludes it as well. Sales tax and general overhead and profit are the two the paper says can be specified and added at print time, after all the line items have been listed. Job-related overhead is excluded for the same reason but placed differently: the paper says it belongs in separate line items of its own.

Job-related overhead is the middle category, and the one most often argued about on a water loss. The paper defines it as expenses “that can be attributed to a project but not a specific task,” meaning anything needed to complete the project other than direct materials and labor. The examples it lists are project managers, onsite portable offices and restroom facilities, temporary power and fencing, and security where a site needs it.

The instruction that follows is not ambiguous: “Job-related overhead expenses should be added as separate line items.” In the publisher's own taxonomy, the time a project manager spends on a job is job-related overhead. It is not a second helping of something the unit prices already paid for. It is the category the paper says belongs on a line of its own — a narrower and much more defensible point than a general argument about markup.

The categories are what a reviewer is actually working from. Our guide on how to read a water mitigation invoice walks the same document line by line, and what a water damage restoration project costs in Northern Virginia covers the pricing of the work itself.

Restoration Doctor does not add overhead and profit to the emergency service call line. What a contractor should be handing a property owner is an itemized invoice priced line by line against the scope, the daily moisture readings from the drying phase, and dated photographs, so that every line can be traced to something that happened in the building. Restoration Doctor invoices the property owner rather than the carrier, so what a reviewer removes from an estimate does not change what the contract says is owed, and reimbursement under the policy is between the owner and the insurer.

The paper answers this about itself. The amount of overhead and profit, and where it is accounted for in an estimate, is “left to the discretion of the estimator based on the conditions of the job and the service provider performing the work,” the paper says. That sentence describes discretion held by the person writing the estimate, not a fixed ceiling set by the price list.

The industry association makes the reference-point argument in the same register. A historical reference point and a current market price are two different things, and the association's own explanation of the gap is that the data is historical. Standardized prices, the association's announcement says, “are merely reference points that are gathered from contractors, insurance company representatives, and other industry professionals,” and the data “is purely historical and because of this, standardized price lists lag behind actual market prices.”

Here is where this post stops. What a particular policy requires a carrier to pay is a question about that policy's words and the facts of that loss, and neither this post nor any contractor answers it. Our companion post on whether an insurer can deny overhead and profit in Virginia sets out what the Virginia rules actually reach and what they leave open.

How a price list is built is a matter of published record, and you have now read the record. What your policy owes is a matter for your carrier, and for a public adjuster or an attorney if it turns into a fight.

Documents beat adjectives. If an estimate line was reduced with an explanation about overhead and profit already being included, the useful response is a short written request for the specifics, so that whatever is decided is decided on paper. Each item below is a request for a document or for a plain answer that already exists somewhere in the file.

Put the claim number on every page and keep what comes back. Claim files change hands, and the person who answers in six months is often not the person who answered the first time.

Both documents are worth reading in the original, and they are short. The publisher's white paper sets out its three overhead categories under their own headings. The association's public announcement sets out four numbered points, and the fourth is the one that speaks to unit prices.

Every quotation above was read out of a copy fetched on September 21, 2026, and the earlier editions of the white paper are named by their dates so they can be found by title.