A backup of a website is a copy of its content, that is kept on a different server and could be restored if something happens. This feature is rather efficient, given that you can't know if a script update won't crash or if you will not eliminate something by mistake - a file, a folder, a database entry, and so forth. When your site is backed up, it can be restored the way it was until the problem appeared, so there shall not be any damage, or at least it shall be very little, depending upon the specific scenario. Keeping backups on your personal computer isn't very feasible, as you'd have to do it at least once every day and you could still lose data if your last backup is not recent enough. In this light, you'll have to rely on your hosting provider, so you ought to double-check their policy on the backups, as some providers create backups just once per week, which will do no good if a problem occurs with a site which is being used and updated all the time, like an online store, for instance.