You asked
How does backup and recovery work?
The short answer
Backups are encrypted copies of the whole sealed record, kept on a drive you control and store off site. If a machine ever fails, you restore onto another one and are running again in minutes.
Because the backup is encrypted, the drive is safe to keep anywhere: whoever finds it holds unreadable ciphertext without your keys.
Recovery is fast because the backup carries the complete sealed chain, and the same sealed format is how a single-office deployment later grows onto a server.