I have had this happen to me when I was on the customer side of the fence. Purchase a hosting plan, get a website going and then, poof! Overnight the company is gone and so is my website. The reseller that I bought from was just as dismayed as I was and didn't know what to do next.

Any advice for preventing or dealing with such a situation (for the reseller)?

Go with a big enough provider. Small operations can go poof. Bigger ones, usually just go bad, not completely disappear. With the company still there, while service will be bad, the servers are likely to be up most of the time, facilitating a relatively smooth move to another provider. One needs to keep an eye on how the company is faring though. Usually, it is a merger or a sale that brings drastic, sudden changes.

I think that the approach to this potential problem should be similar to that of a potential server hardware failure. Keep up to date backups and ensure that you have control over your domain registration. While your site may be down a few hours during a transition to another company or server, you still have control of your site.

Regarding the use of larger companies, I partially agree with idcdc. However, using a smaller company that provides added value in terms of support, etc. is many times beneficial. The key to avoiding potential problems is to ensure that you have a current backup and the company uses a larger/stable provider.

Always back up your data. One goes down, you always have another one to start with. If you don't care about how much you are paying, you can go with the big one.

The message should (indeed) be: Be prepared.

Depending on the importance of your website, have backups (daily at least), fall back locations and don't expect every one else takes care of your business (even though you paid for it). 9999 times out of 10000 you don't need it, but in case you do....

When you are customer yourself, it is hard to detect the signs of a company go down (suppliers have a better view). So don't depend on that.

Be prepared with a plan for that possibility. Make sure you are prepared to jump to another host in a relatively quick manner. That is probably easier said than done. If you manage it with just minor inconveniences to your customers they will appreciate it.

No way to prevent it really, go with a known company and always keep a backup of your data offsite incase things do go down hill quick.

I think that ultimately even big companies can go belly up pretty fast when things go wrong. You could potentially look to have an agreement with the company-contracted-that states that they will warn you and give you X amount of notice before shutting servers down, and hence give you the chance to get your data off their servers.

Sounds like a good idea, however, I wouldn't expect that the agreement would really change the outcome. If the company goes out of business and doesn't provide the service through the end of their customers current contracts, even if they're month-to-month, they've already broke their agreement with their customers.

Not much you can do, just make sure you have backups. I lost one of my sites because of a crap host before

i aggre with dancom take a back up every now and then and save it on your pc so when /or if they go out you can start of from your back up also go would a reliable company that helps a little bit

This needs to be written in big bold letters with every welcome email from a host. I recently just went through the tragedy of a particular VPS provider that magically "deleted" my server and did not have any bakcups. Luckily there was not anything valuable or irreplaceable on that server as I was just testing, but boy you bet I ran out of there quick!

As has been said, a larger companies are very unlikely to go belly up over night. If they do go out of business they will at least try to help the majority of their clients move on, they won't just switch off the servers one day.

Another thing you may want to do when signing up for a new host is find out how long they have been in business, if they opened last week then maybe you don't want to go with them if you are doing anything important.

What's your definition of a 'larger company'? It happens all of the time in other industries. What makes the hosting industry immune to this?

I agree with you Brian. Perhaps in this case this is where a good reseller could win out. You could make it part of your own service (offered for an additional fee) to take back ups daily of your client sites.