These are questions that boards need to be asking of their senior management. While it is possible to outsource a service, you cannot outsource the risk. The responsibility and accountability for ensuring security and resilience of your data and services remains firmly with the board.
If there were houses in this plain, however, it would be optimal for the government to construct dams to protect its citizens. Consequently, if rational agents are certain that the government is not going to build dams to protect the plain, they will not build houses, which would be the best outcome for the economy as a whole.