Data backup is a very tricky area in IT across any industry, ranging from banks through to telecommunications. This isn't because backups are difficult, far from it, nor is the info structure to enable users or system administrators to backup their data.
The issue lies in accountability, if companies where to make steps to state that they where responsible solely for the backup of your data (or anyone elses) if such a catastrophic hardware failure or natural event where to occur that resulted in said company losing, in part or whole your data, they would likely to be liable. In short companies won't take such risks, and those that state they do will have an essential "get out clause" hidden somewhere.
I think it has little to do with how reputable a host is like Sean said, although this is based on whether such services are provided by the host. On the most part hosts do take care of the data residing on their servers for the purpose of hard drive failure more so than file restoration however nothing is fool proof and as said many times before... ensuring the safety of your own data is the responsiblity of "you" and the best methods are physical media and multiple backups (raid/location/versions) is the only real safety.
