Many services in today’s economy are being outsourced to third-party vendors, such as law firms, accountants, human resource consultants, payroll processors, recruiters and credit card processors. But it is difficult if not impossible to outsource liability. Regulators in some industries, and an increasing number of courts in jurisdictions across the country, are holding companies liable for mistakes made by their vendors.
The banking industry in particular has had to deal with vendor liability issues, via regulations imposed by the FDIC and by Dodd-Frank, but it’s only a matter of time until similar standards apply outside banking and financial services.
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