If I have a paid service that supply hosted sites, am I liable for the buyers site if there are losses because of downtime.
Typically, web hosts are not liable for the losses of the buyers site. But to be sure that you are not liable, make sure that you explicitly state what is your responsibly and liability and what is the buyer's responsibility and liability so that in times that issues arises, both of you can go back to that agreement. A number of sites would offer Service Level Agreement (SLA) which would under certain circumstances would refund a portion of the hosting fees paid or compensation in kind, ie free additional month of hosting. If you need to compensate for all the loss incurred by the buyers' site because of downtime then you be exposing yourself to a lot of liability because how would you figure on the amount which is supposedly lost during the downtime when that period has no tracking ? Besides in the end if you compensate then your years of profits can be wiped out in a couple of hours of downtime. Make sure that your compensation agreement is explicit and protect you where you need protection. Most of all, make sure that you host your server on a reliable datacenter with redundant everything and actually have a 24/7 emergency crew. Make sure that on your end, you do the necessary backup of the entire server even if you do not offer backup solutions for your customers. Tell your customers that it is important that they keep backups too and it is their responsibility to take care of their own interests, ie their websites.