TimeMachine and data recovery questions

Thanks for response DBAqua!

Fortunately physically I am the only one having access to it and rarely take it elsewhere BUT just afraid if stolen/lost on a trip someone might get into it. I do always keep most sensitive data fully encrypted but also have access to important business email and other accounts for our company. I guess we can just change passwords ASAP in case it's needed, just get an emergency plan put together if something happens.

Is there a documentation about how the recovery works? I searched YouTube but no one really talks about it. Just would like to see how it works and how safe or insecure it is.

Thank you!