What is a set-off defense in an insurance litigation case?

A set-off defense in an insurance litigation case is a defense used by an insurance company in California when they have to pay out a claim to an insured person. It’s based on the idea that if the insured person has money coming in from another source, the insurance company can “set off” (or reduce) the amount they have to pay by that amount. An example of this would be if an insured person has a settlement coming in from a different lawsuit, and the insurance company can deduct that amount from the settlement they have to pay out. The set-off defense is a way for an insurance company to limit their liability, as they do not have to pay out all of the money if the insured person has another source of income. They can essentially just pay out the difference, rather than the full amount. This can be a powerful tool for an insurance company in California to limit their financial risk, however, it is not always a popular defense for an insured person. Depending on the situation, the insured person may feel as though the set-off defense is unfair, as it means that they will not be getting the full amount due to them.

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What is a set-off defense in an insurance litigation case?

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