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.