Hosted PBX systems rely on a stable internet connection to function properly. If your internet goes down, your phone system may be unavailable. To mitigate this risk, consider having a backup internet connection or using a provider with multiple data centers for redundancy. While hosted PBX providers typically implement robust security measures, there's always a risk of data breaches or cyberattacks. Make sure to choose a provider with a strong security track record and follow best practices for securing your own network and devices.