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If a backup holds sensitive data, encrypt it, in case the copy ever gets out. Most backup software can encrypt the data before it is written to the media.
The lesson's warning comes next. Say the encrypted backup is on removable media in an off-site location, and a fire destroys the data center. To restore, you need the key. If the key was only in the data center, the backup cannot be opened.
So store the keys off site as well, and make sure you can actually restore the encrypted backup. Keep them apart from the media too: a key stored with the backup protects nothing if both are stolen together.
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