A backup of a website is a copy of its content, that is kept on some other server and could be restored if something happens. This function is quite handy, since you cannot know if a script update won't crash or if you will not eliminate something by accident - a file, a folder, a database entry, etc. When your site is backed up, it may be restored the way it was prior to when the problem appeared, so there shall not be any damage, or at least it'll be minimal, depending on the specific scenario. Keeping backups on your laptop or computer isn't very feasible, because 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 web hosting company, so you need to double-check their policy on the backups, because some companies generate backups once per week, that will do no good if a problem occurs with an Internet site that is being used and updated at all times, like an online store, for example.