Losing your Mac to a theft or crash is a nightmare but it can be recovered or repaired. The real drama starts when data is lost or worse, abused by others. Here are some tips to keep your private information and sensitive data secure.

1. File Vault.
Mac OS has this feature built in, it can be enabled in the Accounts preference pane in System Preferences. File Vault encrypts the contents of your home directory making sure that anyone without the master password can never access the contents. Encryption will happen on the fly, you won't notice a thing as it's fast and does not affect your Mac's performance.
Note that Time Machine will only back up your home directory when you are logged out and that if you lose the master password, you will lose your data forever. Also if you have files/folders outside of your home directory they will not be encrypted.

2. Encrypted disk images.
You can create your own encrypted disk images to store sensitive files in using Disk Utility. These disk images will require a password to be opened and once mounted they will function like an external hard drive. For more information and a step-by-step guide click here.

3. Firmware Password.
You can protect your Mac's firmware with a password to prevent other users from booting off the install DVD or putting your Mac in Target Mode. If a user can boot your Mac from the installation DVD they can reset your user accounts password and in Target Mode they can access your entire hard drive as if it was a regular external.
Both methods can be used to eventually gain access to your private data (except for what's inside your home directory if you have File Vault enabled). Though this is a nice way to obstruct any potential harm-doers it cán be bypassed, so don't rely on this too heavy.

4. Don't store account information on your Mac.
These days we have an account here, a subscription there, a personal code for this and a unique ID for that. There are too many names and passwords for all different kinds of services we use to remember so a lot of people type all the information down in a text file and save it on their Mac. Easy to lookup the needed information when it's needed, yes. Smart, absolutely not.
If it has to be written down somewhere do it somewhere on paper and make sure it can not easily be found by anyone.

These tips, combined with always backing up your data should prevent your data from falling in the wrong hands and being misused. If your Mac ever falls into the wrong hands make sure you change as many of your online accounts as possible and provide them with a new password.