Insurance is important but in the long run it is best to be up and running all the time.
Your Web host's facility should have a number of security systems available to protect your server and your data. Look for an uninterruptible power supply to protect your server from power failure. Look for a physically secure facility to protect from theft. Look for a safe structure with high-grade fire protections systems. Find out what other companies share the facility, if any, this will tell you a lot about quality of the Web host's facility.