What does Setoff mean? Read on to discover the definition & meaning of the term Setoff - to help you better understand the language used in insurance policies.
In reinsurance, a setoff or offset is an equitable right that allows parties to cancel or offset mutual debts to each other by asserting the amounts owed, subtracting one from the other, and paying only the balance. The right of setoff is readily available in insurance and reinsurance relationships, and, like all rights, it should be carefully planned for and built into the contractual relationship's terms.
We hope the you have a better understanding of the meaning of Setoff.