How are backups & disaster recovery handled?

Backups and disaster recovery are the backbone of business continuity in software and service agreements. They define how data is protected against loss and how quickly services can be restored after incidents such as cyberattacks, hardware failures, or natural disasters. Both legal frameworks and technical standards shape how these responsibilities are structured.

Legal aspects of backups and DR

• Contractual obligations: SLAs and Master Service Agreements (MSAs) specify retention schedules, recovery timelines, and roles in the event of failure.
  
• Regulatory compliance: GDPR requires data availability and resilience, HIPAA mandates healthcare record backup, and ISO 27001/22301 set global benchmarks for information security and continuity.
  
• Accountability: Contracts assign responsibility for backup maintenance, testing, and reporting.
  
• Penalties: Clients may be entitled to financial credits, damages, or termination rights if obligations are unmet.
  
• Data sovereignty: Some laws restrict where backups can be stored (e.g., EU personal data must stay within the EEA unless safeguards exist).
  

Technical aspects of backups

• Redundancy: Data stored in multiple locations, often using geo-distributed data centers.
  
• Frequency: Full, incremental, or differential backups depending on RPO requirements.
  
• Encryption: Data must be encrypted at rest and in transit to avoid breaches.
  
• Automation: Scheduled, automated backups reduce human error.
  
• Versioning: Allows recovery of previous file states in case of corruption.
  
• Monitoring: Alerts flag failed backup processes.
  

Disaster recovery planning

• RTO (Recovery Time Objective): Maximum acceptable downtime after an incident.
  
• RPO (Recovery Point Objective): Maximum acceptable data loss measured in time.
  
• DR sites: Hot (instant failover), warm (ready with some setup), or cold (basic storage requiring setup).
  
• Testing: Regular drills validate recovery readiness.
  
• Documentation: Plans must specify roles, escalation paths, and communication protocols.
  

Industry practices

• Cloud providers (AWS, Azure, GCP) offer built-in backup and DR solutions, often integrated with compliance certifications.
  
• Outsourcing vendors commonly include DR clauses in contracts, promising quarterly recovery testing.
  
• SaaS startups often adopt automated snapshot systems for databases (e.g., PostgreSQL point-in-time recovery).
  

Risks of poor backup & DR

• Legal liability: Breaches of compliance obligations can result in heavy fines.
  
• Reputation loss: Clients lose trust if data cannot be restored quickly.
  
• Operational downtime: Extended outages can cause missed SLAs, penalties, and churn.
  
• Investor concerns: Weak continuity planning is a red flag in due diligence.
  

Best practices

• Define RTO/RPO in contracts.
  
• Use multi-region, encrypted backups.
  
• Test recovery processes quarterly.
  
• Ensure documentation is part of onboarding/offboarding.
  
• Align DR policies with ISO, SOC 2, or industry-specific regulations.
  

Conclusion

Backups and disaster recovery are both legal commitments and technical realities. Contracts establish obligations, while technology ensures execution. By integrating compliance, automation, and testing, businesses protect data, reputation, and client trust.

Step-by-step

1. Define Objectives: Agree on RTO and RPO in contracts.
   
2. Set Retention Policies: Establish how long backups are stored.
   
3. Choose Storage: Use geo-distributed, compliant data centers.
   
4. Encrypt Data: Secure backups in transit and at rest.
   
5. Automate Backups: Schedule regular, automated processes.
   
6. Monitor & Audit: Log activity and track failed jobs.
   
7. Test Recovery: Run quarterly or semi-annual drills.
   
8. Document Roles: Clarify responsibilities for execution.
   
9. Update Policies: Review after audits or incidents.
   

Use Cases

• Fintech SaaS: Requires multi-region encrypted backups to meet SOC 2 and GDPR rules.
• Healthcare provider: Implements HIPAA-compliant DR plans with quarterly recovery testing.
• E-commerce firm: Uses AWS RDS snapshots with automated 7-day retention.
• Outsourcing vendor: Contracts include 24h RTO and 4h response to incidents.
• Enterprise IT: Operates hot DR sites to ensure zero downtime for mission-critical systems.

Pros & Cons

Pros
• Protects against data loss and downtime
• Ensures compliance with GDPR, HIPAA, ISO, SOC 2
• Builds client trust through documented processes
• Reduces legal and financial liability

Cons
• Costs increase with high RTO/RPO requirements
• Complex to implement across global regions
• Requires ongoing testing and audits
• Human error can still compromise processes if unmonitored

TL;DR

• Backups & DR are contractual + technical commitments.
  
• Contracts define retention, RTO/RPO, compliance, and penalties.
  
• Tech uses automation, encryption, geo-redundancy, and testing.
  
• Strong policies = trust, compliance, and resilience.