Your bookkeeper has a gambling problem. This becomes evident when you discover that tens of thousands of dollars in checks have been paid to vendors that don't exist.

According to a study of 1,900 cases in a 2010 report by the Association of Certified Fraud Examiners, most business fraud is committed by someone in accounting, operations, upper management, or sales. And such situations are usually not covered by business liability insurance.

CRIME INSURANCE Small- to midsize businesses are often more vulnerable to internal theft, such as embezzlement, because they lack the sophisticated controls usually in place at larger operations. This is one reason why some experts suggest that key employees at small- and midsize companies be bonded.

What that means is, essentially, that you purchase a fidelity bond, which is like an insurance policy in that it pays up to a specified limit on certain conditions and it costs the policyholder a premium.

A fidelity bond, or bonding insurance, transfers the risk of crime-related theft such as embezzlement from the business owner to the insurance company. The premium will depend on who in your office is covered, which should be “anyone that is handling money,” says Chris Coleman, of Coleman Insurance Services, in St. Joseph, Mo. Coleman says that type of insurance is easily incorporated into a business owner's policy and, typically, costs are not more than a few hundred dollars per year.

PAY ON CONVICTION Before issuing that policy, the surety company will do a background check on everyone covered by the bond. Policy premium is also determined by the level of internal controls in place. In the event of a claim, the insurance company would indemnify on conviction.