I don't think that this can be emphasised enough -
BACKUP YOUR FILES GODDAMIT !
A business WILL go under if files are not backed-up. Not much different for an individual who loses his/her website. I would be suicidal if all my work was lost because I failed to back-up.
Ideally, version control should be applied to files i.e. local development server should be used separate from the host. Any new development can be tested locally and then when fine, uploaded to the live site.
The local PC should be backed-up to tape or similar device or, if you kind find one to trust, a backup service on the internet.
YOU SHOULD ALWAYS ASSUME THAT YOUR HOST COULD DISAPPEAR TOMMORROW and therefore, that you are in a position re-upload your site to a new server.
btw, when I say disappear, I don't mean that hosts disappear overnight, I mean for cases when their server fails and the backup may not be good or, you may get into a situation when you want to quit your host but you do not get a chance to copy your files. Ok, it is possible that a hosting company could close overnight but with any IT system, backups are always done.