A backup of a website is a copy of its content, that's kept on another web server and could be restored if something happens. This function is rather handy, considering that you cannot know if a script update won't go wrong or if you will not delete something unintentionally - a file, a folder, a database entry, etcetera. If your site is backed up, it can be restored the way it was before the issue appeared, so there shall not be any damage, or at least it shall be little, depending upon the specific case. Keeping backups on your personal computer is not very feasible, as you'll have to do it at least once daily and you could still lose information in case your last backup is not recent enough. In this light, you will have to rely on your hosting provider, so you must double-check their policy on the backups, since some providers create backups once each week, which will do no good if a problem occurs with a site that is being used and updated all the time, such as an online store, for instance.