Losing your laptop can be expensive in three ways. First, you'll spend hundreds or thousands of dollars to replace the hardware. Second, you'll suffer the time and aggravation of restoring your data, all the while hoping you have everything backed up properly. But most expensive? Surviving the backlash and legal consequences of losing customer data, financial records and private company information.

How expensive can that last penalty be? Some experts put the minimum price at $50,000 if you lose customer data that requires you to comply with your state's security breach notification law. All states now have these laws in some form or another. But beyond the legal implications, how would you like to contact all your customers and explain how their financial data was on a laptop you left at the airport security checkpoint?

More than 10,000 laptops per week in the United States stay at the checkpoints after their owners walk away in their retrieved shoes. But if you lose a laptop protected with Full Disk Encryption (FDE), you only have to worry about replacing the hardware and restoring your data. Security breach laws don't apply to laptops with full disk encryption installed because the information on the disk cannot be retrieved without the password.

Disk encryption software hides in the part of the hard disk that initializes the hardware. When you start the machine you provide your password to the encryption software before it loads Windows and your applications and data. Most tools then provide your password to Windows as well, but some may not.

When I say “full disk encryption” I mean a third party option above and beyond normal Windows or Macintosh login security. Your Windows password only stops novice hackers. Windows folder encryption doesn't cover everything, because Windows scatters critical information all over your hard disk. Any disk that doesn't have full disk encryption can be broken and the contents read, particularly if stolen for that reason. Sometimes bad guys are after your good data.

Of course, the 10,000 laptops lost in airports aren't stolen by corporate spies. However, the data breach laws apply to all lost laptops, even those slowly decaying in the lost and found pile (two-thirds of laptops lost at airports are never recovered).