You are correct, but it is usally going to be the last in line that acutally gets stuck with the bill for that liability - ulitimately that means the abstractor.
For example, Bank orders a title search from XYZ VMC who in turns orders a search from Joe Abstractor. A mortgage gets missed and Bank suffers a $100,000 loss. XYZ VMC is liable to the Bank. XYZ VMC should notify their E&O carrier, who will be subgrogated to the rights of XYZ VMC and they will sue Joe Abstractor. Joe better have good insurance!
Best,
Robert A. Franco
SOURCE OF TITLE
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