When I purchase images for clients, I usually (almost always) get them from Dreamstime or iStockPhoto, and their license does indeed allow me to use the images on my clients’ sites.

Dreamstime’s FAQ says,
“Can I use the photos I buy from Dreamstime in more than a single project?
If each project is different as a concept (not a template based presentation) then you can use the photos for more than one client, you don’t have to buy them twice.”

iStockPhoto’s license agreement says,
“Only you are permitted to use the Content, although you may transfer files containing Content or Permitted Derivative Works to your clients, printers, or ISP for the purpose of reproduction for Permitted Uses, provided that such parties shall have no further or additional rights to use the Content and cannot access or extract it from any file you provide.”

So…. Using those images on client sites is permitted by both of those stock photo sources. I like to stick with with the large, reputable sources (such as Dreamstime and iStockPhoto), because I have a certain amount of trust that they police their own sources well enough to ensure that the photos I buy are legitimately provided by the actual copyright holder. It doesn’t mean there’s no risk, but the risk is a lot less.

I’m sure there are other places that sell stock photos that may have more restrictive terms of use, and unfortunately it sounds like you bumped into one of those unintentionally. The design firm should have made sure they were permitted to use the photos on your site, but they didn’t, and now you’re stuck with the results.

In hindsight, you could have asked the design firm about the source of their photos, and checked the licensing terms yourself. I’ve never had a client ask me about that, but I would be happy to tell them where I got the photos if they should ask.

You mention in your article that you will “purchase images for your clients” from stock photo places, which is what I understood this design firm had done, however, it turns out the stock photo place where these photos where obtained DO NOT grant redistribution rights, so the design firm although they had access to the images, could not legally use them on sites other than their own.

My question is, how is a company supposed to verify copyright on these images? I can’t find any way that I would have been able to figure out where these images came from before I got the copyright infringement notice, and now it looks like I’m on the hook for >20k for 10 lousy stock images on my website…

Copyright is something that is abused widely on the internet, and you can never truly know where the huge abondance of images that are online actually come from.

Whilst it may be easy to put a little disclaimer at the bottom of the site, it does not make it legal and it certainly does not give you permission to reproduce the works without the owners express permission and consent.

I’ve just completed a site ( Muay Thai Training in Thailand) and after alot of work, we managed to ensure 100% original content.

Yes it was more expensive and time consuming, but when the customers visit the site then the business – they actually see people they recognise!