A backup of a website is a copy of its content, which is kept on another web server and may be restored if something happens. This feature is rather useful, because you can never know if a script update will not go wrong or if you won't eliminate something by accident - a file, a folder, a database entry, etcetera. If your site is backed up, it may be restored the way it was prior to when the problem appeared, so there will not be any damage, or at least it shall be small, depending upon the specific case. Keeping backups on your computer isn't very feasible, as you'd have to do it at least once per day and you could still lose info if your last backup isn't recent enough. In this light, you'll have to rely on your hosting company, so you need to double-check their policy on the backups, since some providers create backups only once a week, which will do no good if something goes wrong with a site that's being used and updated constantly, such as an online store, for example.