Larry and Mary wrongly assumed that their disaster recovery plan was robust by relying on each other's site as a warm site. However, they overlooked the geographical proximity of their organizations, which exposed them to similar risks – in this case, the power outage caused by a car hitting a nearby utility pole. Their assumption that one site would be available in case the other was compromised failed to account for localized disasters that could affect both sites simultaneously. This highlights a key oversight in their disaster recovery planning: the need to consider and mitigate shared risks due to close geographic proximity.