Usually there are signs before a server completely crashes. Good Web hosts have a backup that they can restore to another or repaired server within an hour, while others might take a little longer. Some don't have a recent backup at all, that's when it gets problematic. The question shouldn't be "what if it crashes" it should be something like "When the server crashes, do you have a recent backup? How recent? How long does it take you to have it back up and running?" This is what determines a good host.

About client details. Well, you'd hope a hosting company wouldn't steal your clients, and even if they do, there will be at least one client who would let you know of their attempt. If they do steal a client, and you have proof, you can build a case. There's always that risk that perhaps a disgruntled employee takes all the information, but that's where the law comes in and the company would not want something like this to get out, so they might settle reasonably.

How do you know which host is good? Reviews and word of mouth.