A backup is a copy of data stored separately from the original. You need it when a disk fails, a file is deleted by mistake, a laptop is lost or ransomware encrypts your files.
A good backup is automatic and regular, at least one copy is stored off-site and — most importantly — restores are tested periodically. A backup that has never been restored may not work when you need it.
Example
Every night the accounting database and shared folders are backed up automatically, and once a month a test file is restored.