An encrypted file, disk or connection is meaningless data without the key. So if a laptop or USB stick is stolen, the data can't be read.
Encryption matters in two main situations: "at rest" (laptop drives, backups, USB sticks) and "in transit" (HTTPS, VPN, email). Most important is storing keys and recovery codes safely: lose them and the data becomes inaccessible to its owner too.
Example
An employee loses a laptop — the drive is encrypted, so customer data stays out of anyone else's hands.