XACT_ABORT may work, but I would recommend you use TRY/CATCH instead for managing exceptions and transactions.

BEGIN TRY;

BEGIN TRAN;

Exec StoredProc1; -- this stored proc perform insert

Exec StoredProc2; -- this stored proc perform insert.Update

COMMIT;

END TRY

BEGIN CATCH

IF XACT_STATE() != 0

ROLLBACK TRAN;

DECLARE @err_str VARCHAR(2048),

@err_sev INT,

@err_state INT;

SELECT @err_str = ERROR_MESSAGE(),

@err_sev = ERROR_SEVERITY(),

@err_state = ERROR_STATE();

RAISERROR(@err_str, @err_sev, @err_state);

END CATCH;