No employer sets out to hire a dishonest worker, but the fact is that often the most tenured and trusted employees commit these crimes. (Photo: Shutterstock)

Imagine finding out that your bookkeeper was forging your signature and issuing herself illicit checks. Or that she was using the company credit card to pay personal bills or buy personal items.

Although unnerving, scenarios like these happen every year to honest business owners. It's no small potatoes loss, either. Insider fraud costs businesses tens of thousands of dollars because, by the time it's detected, the theft has occurred over many months, often resulting in a six-figure financial loss that can decimate a company's solvency.

What motivates an employee to steal from his/her employer?

Every fraudster shares three characteristics that lead him/her to steal. They are:

• A perceived, unshareable financial need, such as a gambling problem, mounting debt or greed.
• The opportunity to access company money for personal use.
• The ability to rationalize that the theft is earned or justifiable.

Related: What coverage applies to alleged thefts by employees?

How can insider fraud be deterred?

Several important internal controls can help reduce the likelihood of employee fraud, including:

• Segregating duties (e.g. making sure the person who pays company bills cannot also sign checks; making sure the person who posts customer payments cannot also post credits to customer accounts)
• Reviewing bank statements and paper copies of canceled checks every month
• Restricting employee use of company credit cards and thoroughly reviewing credit card charges after the fact
• Verifying processed payroll contains authorized payments and deductions for employees
• Using a hotline for whistleblower tips.

Even companies who exercise these best practices against fraud can find themselves victims of an unscrupulous employee, costing the business thousands of dollars. That's why it's so important to be on the offense. Beyond instituting stringent internal controls, one of the best ways to survive insider theft in the unfortunate event it does occur is to carry appropriate employee dishonesty insurance.