diff --git a/frontend/app/onboarding/_components/onboarding-upload.tsx b/frontend/app/onboarding/_components/onboarding-upload.tsx
index 263af7b7..ce7a0f91 100644
--- a/frontend/app/onboarding/_components/onboarding-upload.tsx
+++ b/frontend/app/onboarding/_components/onboarding-upload.tsx
@@ -158,6 +158,16 @@ const OnboardingUpload = ({ onComplete }: OnboardingUploadProps) => {
       const errorMessage = error instanceof Error ? error.message : "Upload failed";
       console.error("Upload failed", errorMessage);
 
+      // Dispatch event that chat context can listen to
+      // This avoids circular dependency issues
+      if (typeof window !== "undefined") {
+        window.dispatchEvent(
+          new CustomEvent("ingestionFailed", {
+            detail: { source: "onboarding" },
+          }),
+        );
+      }
+
       // Show error toast notification
       toast.error("Document upload failed", {
         description: errorMessage,
diff --git a/frontend/components/knowledge-dropdown.tsx b/frontend/components/knowledge-dropdown.tsx
index d0100790..932eb974 100644
--- a/frontend/components/knowledge-dropdown.tsx
+++ b/frontend/components/knowledge-dropdown.tsx
@@ -238,6 +238,15 @@ export function KnowledgeDropdown() {
       await uploadFileUtil(file, replace);
       refetchTasks();
     } catch (error) {
+      // Dispatch event that chat context can listen to
+      // This avoids circular dependency issues
+      if (typeof window !== "undefined") {
+        window.dispatchEvent(
+          new CustomEvent("ingestionFailed", {
+            detail: { source: "knowledge-dropdown" },
+          }),
+        );
+      }
       toast.error("Upload failed", {
         description: error instanceof Error ? error.message : "Unknown error",
       });
diff --git a/frontend/contexts/chat-context.tsx b/frontend/contexts/chat-context.tsx
index 46c8a2f8..59b5edeb 100644
--- a/frontend/contexts/chat-context.tsx
+++ b/frontend/contexts/chat-context.tsx
@@ -112,6 +112,18 @@ export function ChatProvider({ children }: ChatProviderProps) {
     useState<KnowledgeFilter | null>(null);
   const [hasChatError, setChatError] = useState(false);
 
+  // Listen for ingestion failures and set chat error flag
+  useEffect(() => {
+    const handleIngestionFailed = () => {
+      setChatError(true);
+    };
+
+    window.addEventListener("ingestionFailed", handleIngestionFailed);
+    return () => {
+      window.removeEventListener("ingestionFailed", handleIngestionFailed);
+    };
+  }, []);
+
   // Debounce refresh requests to prevent excessive reloads
   const refreshTimeoutRef = useRef<NodeJS.Timeout | null>(null);
 
diff --git a/frontend/contexts/task-context.tsx b/frontend/contexts/task-context.tsx
index 97cdddf1..780bbc7e 100644
--- a/frontend/contexts/task-context.tsx
+++ b/frontend/contexts/task-context.tsx
@@ -323,6 +323,20 @@ export function TaskProvider({ children }: { children: React.ReactNode }) {
               currentTask.error || "Unknown error"
             }`,
           });
+          
+          // Set chat error flag to trigger test_completion=true on health checks
+          // Only for ingestion-related tasks (tasks with files are ingestion tasks)
+          if (currentTask.files && Object.keys(currentTask.files).length > 0) {
+            // Dispatch event that chat context can listen to
+            // This avoids circular dependency issues
+            if (typeof window !== "undefined") {
+              window.dispatchEvent(
+                new CustomEvent("ingestionFailed", {
+                  detail: { taskId: currentTask.task_id },
+                }),
+              );
+            }
+          }
         }
       }
     });