So here is the scenario: you have a stored procedure which inserts new rows to a database table and you want to call it from your .NET code (in my case the application was a BizTalk orchestration using WCF-SQL adapters). You can successfully execute the procedure in SQL Server Management Studio, but when your code calls it, you get an error like this:
INSERT failed because the following SET options have incorrect settings: 'ARITHABORT'
Resolving the error is pretty easy, you add the following line after the BEGIN clause in your stored procedure:
SET ARITHABORT ON;