Among the various latent defects in pouch-type lithium-ion batteries (LIBs), electrode misalignment can occur during cell assembly or due to external impacts during actual operation. However, the effects of electrode misalignment on the electrochemical characteristics have not been sufficiently investigated, especially in pouch-type LIBs. Thus, we systematically design three pouch-type LIBs with different degrees of electrode misalignment (well-aligned, slightly misaligned, and largely misaligned configurations). As the degree of misalignment increases, not only the initial Coulombic efficiency but also the reversible discharge capacity decrease because of Li dendritic growth on the side of the Cu current collector (CC) that overlaps with the misaligned cathode. To address this unavoidable latent defect, we suggest a new strategy to block the side of the Cu CC through application of an insulating layer. This insulating layer can successfully improve both the initial Coulombic efficiency and reversible discharge capacity by efficiently suppressing Li dendritic growth. Thus, this simple idea is an excellent option for ensuring the safety of LIBs with misaligned electrode pairs.