The symbol of the skull is often associated with death.
As a symbol of the deceased, a common idea is that the two bones represent crossed arms, forming a sign of the Christian Cross over the body. However, this custom pre-dates Christianity, as seen in Egyptian mummies of royal males such as Ramesses the Great. This was perhaps seen as a defensive posture to protect the departed in the next life.
In fact, rather than arms, the bones of the Skull and Crossbones are usually two femora (thighbones) which are the longest and largest bones in the body. The skull and these bones can survive much longer than the rest of a skeleton and therefore symbolise extended time; a long time beyond death. In other words, it's a symbol of the very dead.
The skull and crossbones (or at least the skull) symbol has been used by military units for many years: In WWII by the German Army's Nazi Death's Head Division (SS), the British Royal Navy and Royal Australian Navy, etc. It demonstrates their pride after a killing and is supposed to help instil aggression in the servicemen.