I am using Google Web Designer to create a DoubleClick banner ad in HTML5.
The DoubleClick documentation says HTML5 ads should have a 'backup image' for browsers that don't have the capability to run HTML5 - however I can't find an explanation of how to add one anywhere in their documentation - or on Google.
What is the best practice way to add one?
Yes you need to have a backup image.
This is added in Doubleclick (the tools formerly known as Doubleclick) and is not added in GWD.
In GWD just build the html5 banner.
If you are working for a creative agency then for each creative you provide your client, you should provide an html5 banner zip and a corresponding backup image file (not in the zip) alongside the zip.
As an example (Google Campaign Manager), see the Prepare and upload HTML5 assets > What to include in your .zip file
The trafficker will upload the html5 GWD zip and that will be a creative of type html5.
The trafficker will be prompted by google to add a backup image creative (if they didn't upload that first). The trafficker will then upload your backup image in a second step.
Google will detect if the browser requesting the specific ad impression supports html5 and will then serve either the html5 GWD or the image backup as appropriate.