diff --git a/openhands/runtime/impl/docker/docker_runtime.py b/openhands/runtime/impl/docker/docker_runtime.py
index b1a9caa8cf7f..ecb1386a6843 100644
--- a/openhands/runtime/impl/docker/docker_runtime.py
+++ b/openhands/runtime/impl/docker/docker_runtime.py
@@ -121,7 +121,7 @@ async def connect(self):
                     'error',
                     f'Container {self.container_name} not found.',
                 )
-                raise e
+                raise AgentRuntimeDisconnectedError from e
             if self.runtime_container_image is None:
                 if self.base_container_image is None:
                     raise ValueError(
diff --git a/openhands/server/conversation_manager/standalone_conversation_manager.py b/openhands/server/conversation_manager/standalone_conversation_manager.py
index 2f49de63dc9e..ca5d634bc9fb 100644
--- a/openhands/server/conversation_manager/standalone_conversation_manager.py
+++ b/openhands/server/conversation_manager/standalone_conversation_manager.py
@@ -10,6 +10,7 @@
 from openhands.core.logger import openhands_logger as logger
 from openhands.core.schema.agent import AgentState
 from openhands.events.action import MessageAction
+from openhands.events.observation.agent import AgentStateChangedObservation
 from openhands.events.stream import EventStream, session_exists
 from openhands.server.session.conversation import Conversation
 from openhands.server.session.session import ROOM_KEY, Session
@@ -95,6 +96,15 @@ async def join_conversation(
         event_stream = await self._get_event_stream(sid)
         if not event_stream:
             return await self.maybe_start_agent_loop(sid, settings, user_id)
+        for event in event_stream.get_events(reverse=True):
+            if isinstance(event, AgentStateChangedObservation):
+                if event.agent_state in (
+                    AgentState.STOPPED.value,
+                    AgentState.ERROR.value,
+                ):
+                    await self.close_session(sid)
+                    return await self.maybe_start_agent_loop(sid, settings, user_id)
+                break
         return event_stream
 
     async def detach_from_conversation(self, conversation: Conversation):
diff --git a/openhands/server/session/agent_session.py b/openhands/server/session/agent_session.py
index 79b98733850a..cc8453302e9b 100644
--- a/openhands/server/session/agent_session.py
+++ b/openhands/server/session/agent_session.py
@@ -163,10 +163,6 @@ async def close(self):
         if self.security_analyzer is not None:
             await self.security_analyzer.close()
 
-    async def stop_agent_loop_for_error(self):
-        if self.controller is not None:
-            await self.controller.set_agent_state_to(AgentState.ERROR)
-
     def _create_security_analyzer(self, security_analyzer: str | None):
         """Creates a SecurityAnalyzer instance that will be used to analyze the agent actions
 
diff --git a/openhands/server/session/session.py b/openhands/server/session/session.py
index d7807fc94740..48f171e0bc74 100644
--- a/openhands/server/session/session.py
+++ b/openhands/server/session/session.py
@@ -242,7 +242,9 @@ async def send_error(self, message: str):
     async def _send_status_message(self, msg_type: str, id: str, message: str):
         """Sends a status message to the client."""
         if msg_type == 'error':
-            await self.agent_session.stop_agent_loop_for_error()
+            controller = self.agent_session.controller
+            if controller is not None:
+                await controller.set_agent_state_to(AgentState.ERROR)
         await self.send(
             {'status_update': True, 'type': msg_type, 'id': id, 'message': message}
         )