This just happened - a virtual/cloud/shared hosting company deleted over 800,000 of its customers websites - evidently entirely. Ouch! Here's the story in the UK Mirror. Occurrences like this are too common. See our posts here and here.
We think a very important question to ask your web developer is, "Where is my website hosted?" In light of this story, it is also good to ask, "What about website backups?"
In our case, all of our client's websites are hosted on our dedicated servers at Rackspace. We also have 14 backup copies of every website we host - one from each of the last 14 days. That way we can restore all or part of our clients websites as needed.
What happened this weekend in the UK is unthinkable and usually doesn't enter our minds. But it happens more than we know - usually kept quiet, or not on large enough scale to make the news. So ask the questions - your peace of mind depends on it.