Error Details:

Failed to create processing task for VM HO-PROD1 Error: Cannot find suitable proxy for retrieving data from storage snapshot, and the option to failover to backup from VM snapshot is disabled.

Solution:

To resolve this issue open up Properties of that backup job, navigate to “Storage” -> Advance Options

Click “Failover to standard backup” field under the Advanced Settings page was not selected by me, and after the relevant field was ticked , after the backup job was started.

Reference Link:

https://helpcenter.veeam.com/archive/backup/95u4/vsphere/storage_backup.html