You only have 240GB of free space on your external drive, and it's unlikely that you'll be able to back up both the Windows OS and the E: drive (about 760GB of data in total) to that drive, even with the maximum compression level.
You should use the System backup feature instead of the Disk/Partition backup feature to back up the Windows operating system, which ensures that all partitions (system, boot and recovery partitions.) related to the Windows operating system are backed up so that the restored Windows operating system can boot normally.
@peas is right, you'd better create a bootable emergency USB drive so that you can boot from that USB drive to restore Windows if the upgrade fails and your computer doesn't boot properly.
You should use the System backup feature instead of the Disk/Partition backup feature to back up the Windows operating system, which ensures that all partitions (system, boot and recovery partitions.) related to the Windows operating system are backed up so that the restored Windows operating system can boot normally.
@peas is right, you'd better create a bootable emergency USB drive so that you can boot from that USB drive to restore Windows if the upgrade fails and your computer doesn't boot properly.