Offsetting is a term used to describe the process of making up for something that has been lost or damaged. It is often used in financial contexts, such as when a company compensates for losses incurred due to a natural disaster or other unexpected event. In this context, offsetting means providing a payment or other form of compensation to make up for the losses. Compensating for something can also refer to providing a benefit or reward to someone in exchange for their services or efforts. This could include providing a bonus or other incentive to an employee for their hard work.