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In Massachusetts, do insurance companies have to pay O&P by law?

MassachusettsPayment Disputes

Have an insurance company saying they will not pay O&P for a roofing, gutter, siding and fense job.

1 reply

Dec 26, 2018
I'm sorry to hear that. As a general matter, where overhead and profits are contemplated in the contract for work (whether that be as part of the overall price or specifically set out under the contract), the party making payment will be responsible to pay the amount agreed to. It's not uncommon for an insurance company to fight paying overhead and profit, but at the end of the day, the GC's time, expertise, and supervision/coordination have monetary value. It's a business, and when working with a GC, insurers should know that's the cost of doing business. Still - if general overhead and profit were set to be included by contract, generally, those amounts will be recoverable. Note, though, that it's unclear as to whether those amounts might be included if recovery will come via mechanics lien. If overhead and profits were not included in the contract, it might be harder to justify their inclusion later down the line - though, it's not clear whether Massachusetts allows for the recovery of those amounts via some legal process other than mechanics liens, either. For further clarity, it would likely be worthwhile to reach out to a local construction lawyer who's worked with insurers in the past. They'll have a better idea as to how overhead and profits are handled there.
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