"Cloud Backup" sounds mysterious, but simply means storing important digital files in a secure online repository. If catastrophe strikes (fire, robbery, flood, etc.) you still have access to an up-to-date copy of your data, even if the local equipment is destroyed. But is it safe? Well, honestly, any digital data storage solution carries some risk—but so does storing your files on a drive in your office, then keeping a backup disk in the same office as the original. (I've seen it ... it may have even been me!)
Other options include having an off-site backup server. But this is too technically complex for most businesses. Safe bet is a little of both: maintain a local backup of your files, which goes home with a trusted employee at 5 p.m., or is locked in a flood/fire-proof manner. AND maintain an encrypted cloud backup, which is not expensive.
If you're interested in learning more, check out ZDNet's comparison of popular cloud services.