diff --git a/homeassistant/components/demo/update.py b/homeassistant/components/demo/update.py
index a48c4a3cab2..d3b3aacfa68 100644
--- a/homeassistant/components/demo/update.py
+++ b/homeassistant/components/demo/update.py
@@ -134,10 +134,7 @@ class DemoUpdate(UpdateEntity):
             self._attr_supported_features |= UpdateEntityFeature.PROGRESS
 
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update."""
         if self.supported_features & UpdateEntityFeature.PROGRESS:
diff --git a/homeassistant/components/hassio/update.py b/homeassistant/components/hassio/update.py
index 71f97c62b96..19aee6dad37 100644
--- a/homeassistant/components/hassio/update.py
+++ b/homeassistant/components/hassio/update.py
@@ -170,10 +170,7 @@ class SupervisorOSUpdateEntity(HassioOSEntity, UpdateEntity):
         )
 
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update."""
         try:
@@ -214,10 +211,7 @@ class SupervisorSupervisorUpdateEntity(HassioSupervisorEntity, UpdateEntity):
         return "https://brands.home-assistant.io/hassio/icon.png"
 
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update."""
         try:
@@ -262,10 +256,7 @@ class SupervisorCoreUpdateEntity(HassioCoreEntity, UpdateEntity):
         return f"https://{'rc' if version.beta else 'www'}.home-assistant.io/latest-release-notes/"
 
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update."""
         try:
diff --git a/homeassistant/components/update/__init__.py b/homeassistant/components/update/__init__.py
index 7fb92d8164c..b514553208e 100644
--- a/homeassistant/components/update/__init__.py
+++ b/homeassistant/components/update/__init__.py
@@ -82,7 +82,7 @@ async def async_setup(hass: HomeAssistant, config: ConfigType) -> bool:
         SERVICE_INSTALL,
         {
             vol.Optional(ATTR_VERSION): cv.string,
-            vol.Optional(ATTR_BACKUP): cv.boolean,
+            vol.Optional(ATTR_BACKUP, default=False): cv.boolean,
         },
         async_install,
         [UpdateEntityFeature.INSTALL],
@@ -128,7 +128,7 @@ async def async_install(entity: UpdateEntity, service_call: ServiceCall) -> None
 
     # If backup is requested, but not supported by the entity.
     if (
-        backup := service_call.data.get(ATTR_BACKUP)
+        backup := service_call.data[ATTR_BACKUP]
     ) and not entity.supported_features & UpdateEntityFeature.BACKUP:
         raise HomeAssistantError(f"Backup is not supported for {entity.name}")
 
@@ -245,10 +245,7 @@ class UpdateEntity(RestoreEntity):
         self.async_write_ha_state()
 
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update.
 
@@ -260,12 +257,7 @@ class UpdateEntity(RestoreEntity):
         """
         await self.hass.async_add_executor_job(self.install, version, backup)
 
-    def install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
-    ) -> None:
+    def install(self, version: str | None, backup: bool, **kwargs: Any) -> None:
         """Install an update.
 
         Version can be specified to install a specific version. When `None`, the
@@ -323,9 +315,7 @@ class UpdateEntity(RestoreEntity):
 
     @final
     async def async_install_with_progress(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
+        self, version: str | None, backup: bool
     ) -> None:
         """Install update and handle progress if needed.
 
diff --git a/homeassistant/components/wled/update.py b/homeassistant/components/wled/update.py
index 197d5f4c580..098f2ca3831 100644
--- a/homeassistant/components/wled/update.py
+++ b/homeassistant/components/wled/update.py
@@ -80,10 +80,7 @@ class WLEDUpdateEntity(WLEDEntity, UpdateEntity):
 
     @wled_exception_handler
     async def async_install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-        **kwargs: Any,
+        self, version: str | None, backup: bool, **kwargs: Any
     ) -> None:
         """Install an update."""
         if version is None:
diff --git a/tests/components/update/test_init.py b/tests/components/update/test_init.py
index 35366217a3d..7d175337d13 100644
--- a/tests/components/update/test_init.py
+++ b/tests/components/update/test_init.py
@@ -117,10 +117,10 @@ async def test_update(hass: HomeAssistant) -> None:
     assert update.entity_category is EntityCategory.DIAGNOSTIC
 
     with pytest.raises(NotImplementedError):
-        await update.async_install()
+        await update.async_install(version=None, backup=True)
 
     with pytest.raises(NotImplementedError):
-        update.install()
+        update.install(version=None, backup=False)
 
     update.install = MagicMock()
     await update.async_install(version="1.0.1", backup=True)
diff --git a/tests/testing_config/custom_components/test/update.py b/tests/testing_config/custom_components/test/update.py
index aeac37d198e..83b2c065b2e 100644
--- a/tests/testing_config/custom_components/test/update.py
+++ b/tests/testing_config/custom_components/test/update.py
@@ -6,6 +6,7 @@ Call init before using it in your tests to ensure clean test data.
 from __future__ import annotations
 
 import logging
+from typing import Any
 
 from homeassistant.components.update import UpdateEntity, UpdateEntityFeature
 
@@ -49,11 +50,7 @@ class MockUpdateEntity(MockEntity, UpdateEntity):
         """Title of the software."""
         return self._handle("title")
 
-    def install(
-        self,
-        version: str | None = None,
-        backup: bool | None = None,
-    ) -> None:
+    def install(self, version: str | None, backup: bool, **kwargs: Any) -> None:
         """Install an update."""
         if backup:
             _LOGGER.info("Creating backup before installing update")