VSS: Backup fails with "Expected provider error. Check the event log for details." (4035190)

Backups fail with VSS error:

Example Stack trace:

Replay.Agent.Contracts.Transfer.TransferFailedException: The transfer failed: 'There was a problem with the VSS subsystem on 'Agent01'.' ---> System.AggregateException: One or more errors occurred. ---> Replay.Core.Contracts.Transfer.VssGeneralErrorException: There was a problem with the VSS subsystem on 'Agent01'. ---> Replay.Agent.Contracts.ShadowCopy.ShadowCopyException: DoSnapshotSet failed with error: 'Expected provider error. Check the event log for details.'

Checking Event logs on the Agent machine you find volsnap error, Event ID 25:

The shadow copies of volume C: were deleted because the shadow copy storage could not grow in time.  Consider reducing the IO load on the system or choose a shadow copy storage volume that is not being shadow copied.

Resolution of this issue will be on the Agent machine. Log into the Agent machine and check Shadow Copies settings. We recommend to:

1. On the server right click on any volume and select Properties.
2. Click the Shadows Copies tab.
3. For each volume:
   1. Check if Shadow copes are enabled, if yes, click Disable or check the schedule and change to work around our back up schedule.
   2. Click Settings.
   3. In the Settings windows set Maximum size to No limit, and click OK.
4. Repeat for all volumes.

Please Note: Desktop operating systems do not have a Shadow copies tab. In order to set shadow copies to unlimited you must do so by command line.