Maybe. But don't forget this is a small company of just two people. Yes the backups should have been off site but relying on just one digital partner at that scale isn't the worst (they're unlikely to have the money or time to federate out to other services).
Yes, ideally they would have already tested their back-up solution, the back-ups would be offsite and, if something like this happened, they could stand-up on another provider. But that just ignores the reality of them being a super tiny business. Almost no one at that size is going to do that.
I disagree. Many 1 and 2 person shops implement proper off-site backups because they understand that loosing their data is a death sentence for their business. Proper off-site backups are neither expensive nor time consuming to establish these days. There is no good excuse for even the tiniest of companies to not implement them.
Actually, you can implement cheap external backups even in a 1-man company.
But I still support that DO here is a 100% liable toward their client. Now the liability between the said client and his own clients is an other matter.
Yes, ideally they would have already tested their back-up solution, the back-ups would be offsite and, if something like this happened, they could stand-up on another provider. But that just ignores the reality of them being a super tiny business. Almost no one at that size is going to do that.