diff --git a/Makefile b/Makefile
index c5a8929..ebb4131 100644
--- a/Makefile
+++ b/Makefile
@@ -46,7 +46,7 @@ ARCH ?= $(shell go env GOARCH)
 OS ?= $(shell uname -s | tr A-Z a-z)
 K8S_LATEST_VER ?= $(shell curl -s https://storage.googleapis.com/kubernetes-release/release/stable.txt)
 export CONTROLLER_IMG ?= $(REGISTRY)/$(IMAGE_NAME)
-TAG ?= v1.16.0
+TAG ?= main
 
 ## Tool Binaries
 CONTROLLER_GEN := $(TOOLS_BIN_DIR)/controller-gen
diff --git a/config/default/manager_auth_proxy_patch.yaml b/config/default/manager_auth_proxy_patch.yaml
index 1c440e7..9839d83 100644
--- a/config/default/manager_auth_proxy_patch.yaml
+++ b/config/default/manager_auth_proxy_patch.yaml
@@ -16,7 +16,7 @@ spec:
         - "--shard-key="
         - --capi-onboard-annotation=
         - "--v=5"
-        - "--version=v1.16.0"
+        - "--version=main"
         - "--registry="
         - "--agent-in-mgmt-cluster=false"
         env:
diff --git a/config/default/manager_image_patch.yaml b/config/default/manager_image_patch.yaml
index 9662f31..d94ebc6 100644
--- a/config/default/manager_image_patch.yaml
+++ b/config/default/manager_image_patch.yaml
@@ -7,9 +7,9 @@ spec:
   template:
     spec:
       initContainers:
-      - image: docker.io/projectsveltos/classifier:v1.16.0
+      - image: docker.io/projectsveltos/classifier:main
         name: migrate
       containers:
       # Change the value of image field below to your controller image URL
-      - image: docker.io/projectsveltos/classifier:v1.16.0
+      - image: docker.io/projectsveltos/classifier:main
         name: manager
diff --git a/config/rbac/role.yaml b/config/rbac/role.yaml
index 7bf52b8..505f543 100644
--- a/config/rbac/role.yaml
+++ b/config/rbac/role.yaml
@@ -66,6 +66,14 @@ rules:
   - get
   - list
   - watch
+- apiGroups:
+  - events.k8s.io
+  resources:
+  - events
+  verbs:
+  - create
+  - patch
+  - update
 - apiGroups:
   - lib.projectsveltos.io
   resources:
diff --git a/controllers/classifier_controller.go b/controllers/classifier_controller.go
index 9931dba..33f4550 100644
--- a/controllers/classifier_controller.go
+++ b/controllers/classifier_controller.go
@@ -27,6 +27,7 @@ import (
 	corev1 "k8s.io/api/core/v1"
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/client-go/tools/events"
 	clusterv1 "sigs.k8s.io/cluster-api/api/core/v1beta2"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/builder"
@@ -42,6 +43,7 @@ import (
 	libsveltosv1beta1 "github.com/projectsveltos/libsveltos/api/v1beta1"
 	"github.com/projectsveltos/libsveltos/lib/clusterproxy"
 	"github.com/projectsveltos/libsveltos/lib/deployer"
+	"github.com/projectsveltos/libsveltos/lib/eventreasons"
 	logs "github.com/projectsveltos/libsveltos/lib/logsettings"
 	predicates "github.com/projectsveltos/libsveltos/lib/predicates"
 	libsveltosset "github.com/projectsveltos/libsveltos/lib/set"
@@ -115,6 +117,9 @@ type ClassifierReconciler struct {
 	// List of current existing Classifiers
 	AllClassifierSet libsveltosset.Set
 
+	// EventRecorder is used to record events on Classifier instances. No event is recorded when nil.
+	EventRecorder events.EventRecorder
+
 	Logger logr.Logger
 }
 
@@ -133,6 +138,7 @@ type ClassifierReconciler struct {
 //+kubebuilder:rbac:groups="",resources=secrets,verbs=get;list;watch
 //+kubebuilder:rbac:groups="",resources=configmaps,verbs=get;list;watch;delete
 //+kubebuilder:rbac:groups="apps",resources=deployments,verbs=get;list;watch
+//+kubebuilder:rbac:groups="events.k8s.io",resources=events,verbs=create;update;patch
 
 func (r *ClassifierReconciler) Reconcile(ctx context.Context, req ctrl.Request) (_ ctrl.Result, reterr error) {
 	if r.ShardKey != "" {
@@ -279,6 +285,7 @@ func (r *ClassifierReconciler) reconcileNormal(
 	matchingClusters, err := r.syncAndGetMatchingClusters(ctx, classifierScope, logger)
 	if err != nil {
 		logger.V(logs.LogDebug).Error(err, "failed to get matching clusters")
+		r.recordReconcileFailure(classifierScope.Classifier, "get matching clusters", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 	trackMatchingClusters(classifierScope.Classifier.Name, len(matchingClusters), logger)
@@ -288,6 +295,7 @@ func (r *ClassifierReconciler) reconcileNormal(
 	if err != nil {
 		// Use Error level because this indicates a failure to clean up resources
 		logger.V(logs.LogDebug).Error(err, "failed to clean up labels/registrations for non-matching clusters")
+		r.recordReconcileFailure(classifierScope.Classifier, "clean up labels and registrations for clusters no longer matching", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
@@ -295,6 +303,7 @@ func (r *ClassifierReconciler) reconcileNormal(
 	matchingStatuses, err := r.updateMatchingClustersAndRegistrations(ctx, classifierScope, matchingClusters, logger)
 	if err != nil {
 		logger.V(logs.LogDebug).Error(err, "failed to update status/registrations for matching clusters")
+		r.recordReconcileFailure(classifierScope.Classifier, "update status and registrations for matching clusters", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 	trackLabelConflicts(classifierScope.Classifier.Name, countUnManagedLabelClusters(matchingStatuses), logger)
@@ -303,23 +312,28 @@ func (r *ClassifierReconciler) reconcileNormal(
 	err = r.updateLabelsOnMatchingClusters(ctx, classifierScope, matchingStatuses, logger)
 	if err != nil {
 		logger.V(logs.LogDebug).Error(err, "failed to apply labels to matching clusters")
+		r.recordReconcileFailure(classifierScope.Classifier, "apply labels to matching clusters", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
 	err = r.ensureClassifierReports(ctx, classifierScope)
 	if err != nil {
 		logger.V(logs.LogDebug).Error(err, "failed to ensure ClassifierReports")
+		r.recordReconcileFailure(classifierScope.Classifier, "ensure ClassifierReports", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
 	if err := r.updateMaps(ctx, classifierScope); err != nil {
 		logger.V(logs.LogDebug).Error(err, "failed to update internal maps")
+		r.recordReconcileFailure(classifierScope.Classifier, "update internal maps", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
 	f := getHandlersForFeature(libsveltosv1beta1.FeatureClassifier)
 
 	if err := r.deployClassifier(ctx, classifierScope, f, logger); err != nil {
+		// No event here: the error is also returned while the deployment is still in progress.
+		// Terminal failures are recorded per cluster, in deployClassifier.
 		logger.V(logs.LogInfo).Error(err, "failed to deploy")
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
@@ -332,6 +346,14 @@ func (r *ClassifierReconciler) reconcileNormal(
 	return reconcile.Result{}, nil
 }
 
+// recordReconcileFailure records a Warning event on the Classifier for a reconcile step that failed.
+// Those errors are only logged at debug level and the reconciler retries, so without the event
+// the failure is not visible to the user.
+func (r *ClassifierReconciler) recordReconcileFailure(classifier *libsveltosv1beta1.Classifier, step string, err error) {
+	recordWarningf(r.EventRecorder, classifier, eventreasons.ClassifierFailed, eventreasons.ActionReconciling,
+		"failed to %s: %v", step, err)
+}
+
 // SetupWithManager sets up the controller with the Manager.
 func (r *ClassifierReconciler) SetupWithManager(ctx context.Context,
 	mgr ctrl.Manager, logger logr.Logger) (controller.Controller, error) {
@@ -525,6 +547,9 @@ func (r *ClassifierReconciler) updateMatchingClustersAndRegistrations(ctx contex
 
 		if len(unmanaged) > 0 {
 			hasUnmanaged = true
+			recordWarningf(r.EventRecorder, classifierScope.Classifier, eventreasons.ClassifierLabelConflict,
+				eventreasons.ActionReconciling, "cluster %s/%s: label keys %s are managed by another Classifier",
+				c.Namespace, c.Name, unmanagedLabelKeys(unmanaged))
 		}
 
 		if err := updateClassifierReportLabelStatus(ctx, r.Client, classifierScope.Classifier.Name,
diff --git a/controllers/classifier_controller_test.go b/controllers/classifier_controller_test.go
index 97ba08c..f3ff274 100644
--- a/controllers/classifier_controller_test.go
+++ b/controllers/classifier_controller_test.go
@@ -28,6 +28,7 @@ import (
 	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 	"k8s.io/apimachinery/pkg/types"
+	"k8s.io/client-go/tools/events"
 	"k8s.io/klog/v2/textlogger"
 	clusterv1 "sigs.k8s.io/cluster-api/api/core/v1beta2"
 	ctrl "sigs.k8s.io/controller-runtime"
@@ -321,12 +322,14 @@ var _ = Describe("Classifier: Reconciler", func() {
 		// cluster even though cluster is a match
 		manager.RegisterClassifierForLabels(classifier1, clusterNamespace, clusterName, libsveltosv1beta1.ClusterTypeCapi)
 
+		recorder := events.NewFakeRecorder(eventBufferSize)
 		reconciler := &controllers.ClassifierReconciler{
 			Client:        c,
 			Scheme:        scheme,
 			ClusterMap:    make(map[corev1.ObjectReference]*libsveltosset.Set),
 			ClassifierMap: make(map[corev1.ObjectReference]*libsveltosset.Set),
 			Mux:           sync.Mutex{},
+			EventRecorder: recorder,
 			Logger:        logger,
 		}
 
@@ -358,6 +361,13 @@ var _ = Describe("Classifier: Reconciler", func() {
 			updatedReport)).To(Succeed())
 		Expect(updatedReport.Status.ManagedLabels).To(BeEmpty())
 		Expect(updatedReport.Status.UnManagedLabels).To(HaveLen(len(classifier.Spec.ClassifierLabels)))
+
+		// The conflict is also reported as an event, so it is visible without reading ClassifierReport.
+		var recorded string
+		Expect(recorder.Events).To(Receive(&recorded))
+		Expect(recorded).To(HavePrefix("Warning ClassifierLabelConflict cluster " + clusterNamespace + "/" + clusterName))
+		Expect(recorded).To(ContainSubstring("managed by another Classifier"))
+		Expect(recorded).To(ContainSubstring(classifier.Spec.ClassifierLabels[0].Key))
 	})
 
 	It("updateLabelsOnMatchingClusters updates CAPI Cluster labels", func() {
diff --git a/controllers/classifier_deployer.go b/controllers/classifier_deployer.go
index a44181c..9c08304 100644
--- a/controllers/classifier_deployer.go
+++ b/controllers/classifier_deployer.go
@@ -52,6 +52,7 @@ import (
 	"github.com/projectsveltos/libsveltos/lib/clusterproxy"
 	"github.com/projectsveltos/libsveltos/lib/crd"
 	"github.com/projectsveltos/libsveltos/lib/deployer"
+	"github.com/projectsveltos/libsveltos/lib/eventreasons"
 	"github.com/projectsveltos/libsveltos/lib/k8s_utils"
 	logs "github.com/projectsveltos/libsveltos/lib/logsettings"
 	"github.com/projectsveltos/libsveltos/lib/patcher"
@@ -188,6 +189,7 @@ func (r *ClassifierReconciler) deployClassifier(ctx context.Context, classifierS
 				errorSeen = updateErr
 			} else {
 				trackClassifierOutcome(classifierScope.Classifier.Name, cluster, clusterInfo, l)
+				r.recordDeploymentFailure(classifierScope.Classifier, cluster, clusterInfo)
 			}
 			if clusterInfo.Status != libsveltosv1beta1.SveltosStatusProvisioned {
 				allProcessed = false
@@ -204,6 +206,30 @@ func (r *ClassifierReconciler) deployClassifier(ctx context.Context, classifierS
 	return nil
 }
 
+// recordDeploymentFailure records a Warning event on the Classifier when the deployment in a cluster
+// failed. Only terminal failures are recorded: a deployment that is still in progress, or a cluster
+// that is paused or not ready yet, is an expected state and not something the user must act on.
+func (r *ClassifierReconciler) recordDeploymentFailure(classifier *libsveltosv1beta1.Classifier,
+	cluster *corev1.ObjectReference, clusterInfo *libsveltosv1beta1.ClusterInfo) {
+
+	if clusterInfo.FailureMessage == nil || *clusterInfo.FailureMessage == "" {
+		return
+	}
+
+	switch clusterInfo.Status {
+	case libsveltosv1beta1.SveltosStatusFailed:
+		recordWarningf(r.EventRecorder, classifier, eventreasons.ClassifierFailed, eventreasons.ActionDeploying,
+			"cluster %s/%s: %s", cluster.Namespace, cluster.Name, *clusterInfo.FailureMessage)
+	case libsveltosv1beta1.SveltosStatusFailedNonRetriable:
+		// The only non retriable failure is the agent of a cluster in pull mode not reporting. That is a
+		// problem of the cluster, not of this Classifier: it is not reported here, once per Classifier, but
+		// once per cluster by sveltoscluster-manager.
+	case libsveltosv1beta1.SveltosStatusProvisioning, libsveltosv1beta1.SveltosStatusProvisioned,
+		libsveltosv1beta1.SveltosStatusRemoving, libsveltosv1beta1.SveltosStatusRemoved:
+		// Not a failure: nothing to report
+	}
+}
+
 func (r *ClassifierReconciler) undeployClassifier(ctx context.Context, classifierScope *scope.ClassifierScope,
 	f feature, logger logr.Logger) error {
 
diff --git a/controllers/events.go b/controllers/events.go
new file mode 100644
index 0000000..93d15c5
--- /dev/null
+++ b/controllers/events.go
@@ -0,0 +1,53 @@
+/*
+Copyright 2026. projectsveltos.io. All rights reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package controllers
+
+import (
+	"fmt"
+	"strings"
+
+	corev1 "k8s.io/api/core/v1"
+	"k8s.io/apimachinery/pkg/runtime"
+	"k8s.io/client-go/tools/events"
+
+	libsveltosv1beta1 "github.com/projectsveltos/libsveltos/api/v1beta1"
+	"github.com/projectsveltos/libsveltos/lib/eventreasons"
+)
+
+// recordWarningf records a Warning event on regarding. It does nothing when no recorder is set.
+// The note is capped, so an oversized message is not rejected by the API server. Identical events
+// are aggregated by the recorder, so notes must not contain anything that changes between
+// reconciliations (timestamps, counters).
+func recordWarningf(recorder events.EventRecorder, regarding runtime.Object, reason, action, format string, args ...any) {
+	if recorder == nil {
+		return
+	}
+
+	note := eventreasons.TruncateNote(fmt.Sprintf(format, args...))
+	recorder.Eventf(regarding, nil, corev1.EventTypeWarning, reason, action, "%s", note)
+}
+
+// unmanagedLabelKeys returns the keys of the labels the Classifier wants to manage but cannot,
+// because they are managed by another instance, as a single comma separated string.
+func unmanagedLabelKeys(unmanaged []libsveltosv1beta1.UnManagedLabel) string {
+	keys := make([]string, len(unmanaged))
+	for i := range unmanaged {
+		keys[i] = unmanaged[i].Key
+	}
+
+	return strings.Join(keys, ", ")
+}
diff --git a/controllers/events_test.go b/controllers/events_test.go
new file mode 100644
index 0000000..2c7fcec
--- /dev/null
+++ b/controllers/events_test.go
@@ -0,0 +1,184 @@
+/*
+Copyright 2026. projectsveltos.io. All rights reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package controllers_test
+
+import (
+	"context"
+	"errors"
+	"strings"
+
+	. "github.com/onsi/ginkgo/v2"
+	. "github.com/onsi/gomega"
+
+	corev1 "k8s.io/api/core/v1"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	"k8s.io/apimachinery/pkg/types"
+	"k8s.io/client-go/tools/events"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/client/fake"
+
+	"github.com/projectsveltos/classifier/controllers"
+	libsveltosv1beta1 "github.com/projectsveltos/libsveltos/api/v1beta1"
+	"github.com/projectsveltos/libsveltos/lib/eventreasons"
+)
+
+const eventBufferSize = 10
+
+var _ = Describe("Classifier events", func() {
+	var classifier *libsveltosv1beta1.Classifier
+	var cluster *corev1.ObjectReference
+	var recorder *events.FakeRecorder
+	var reconciler *controllers.ClassifierReconciler
+
+	BeforeEach(func() {
+		classifier = getClassifierInstance(randomString())
+		cluster = &corev1.ObjectReference{
+			Namespace:  randomString(),
+			Name:       randomString(),
+			APIVersion: libsveltosv1beta1.GroupVersion.String(),
+			Kind:       libsveltosv1beta1.SveltosClusterKind,
+		}
+		recorder = events.NewFakeRecorder(eventBufferSize)
+		reconciler = &controllers.ClassifierReconciler{EventRecorder: recorder}
+	})
+
+	Context("recordWarningf", func() {
+		It("does nothing when no recorder is set", func() {
+			Expect(func() {
+				controllers.RecordWarningf(nil, classifier, eventreasons.ClassifierFailed,
+					eventreasons.ActionReconciling, "failed: %v", errors.New("boom"))
+			}).ToNot(Panic())
+		})
+
+		It("records a Warning event with the reason and the note", func() {
+			controllers.RecordWarningf(recorder, classifier, eventreasons.ClassifierFailed,
+				eventreasons.ActionReconciling, "failed to do %s", "something")
+
+			Expect(recorder.Events).To(Receive(Equal("Warning ClassifierFailed failed to do something")))
+		})
+
+		It("does not interpret a percent sign in the message", func() {
+			controllers.RecordWarningf(recorder, classifier, eventreasons.ClassifierFailed,
+				eventreasons.ActionReconciling, "%s", "disk usage 100%d")
+
+			Expect(recorder.Events).To(Receive(Equal("Warning ClassifierFailed disk usage 100%d")))
+		})
+
+		It("caps a note longer than the API server accepts", func() {
+			longMessage := strings.Repeat("a", eventreasons.NoteMaxLength*2)
+			controllers.RecordWarningf(recorder, classifier, eventreasons.ClassifierFailed,
+				eventreasons.ActionReconciling, "%s", longMessage)
+
+			var recorded string
+			Expect(recorder.Events).To(Receive(&recorded))
+			note := strings.TrimPrefix(recorded, "Warning ClassifierFailed ")
+			Expect(len(note)).To(Equal(eventreasons.NoteMaxLength))
+			Expect(note).To(HaveSuffix("...(truncated)"))
+		})
+	})
+
+	Context("unmanagedLabelKeys", func() {
+		It("returns the keys separated by a comma", func() {
+			unmanaged := []libsveltosv1beta1.UnManagedLabel{{Key: "env"}, {Key: "region"}}
+			Expect(controllers.UnmanagedLabelKeys(unmanaged)).To(Equal("env, region"))
+		})
+	})
+
+	Context("recordReconcileFailure", func() {
+		It("records a Warning ClassifierFailed event naming the step and the error", func() {
+			controllers.RecordReconcileFailure(reconciler, classifier, "apply labels to matching clusters", errors.New("boom"))
+
+			Expect(recorder.Events).To(Receive(Equal(
+				"Warning ClassifierFailed failed to apply labels to matching clusters: boom")))
+		})
+	})
+
+	Context("recordDeploymentFailure", func() {
+		clusterInfo := func(status libsveltosv1beta1.SveltosFeatureStatus, failureMessage *string,
+		) *libsveltosv1beta1.ClusterInfo {
+
+			return &libsveltosv1beta1.ClusterInfo{Status: status, FailureMessage: failureMessage}
+		}
+
+		message := func(s string) *string { return &s }
+
+		It("records ClassifierFailed when the deployment failed", func() {
+			controllers.RecordDeploymentFailure(reconciler, classifier, cluster,
+				clusterInfo(libsveltosv1beta1.SveltosStatusFailed, message("failed to deploy CRDs")))
+
+			Expect(recorder.Events).To(Receive(Equal(
+				"Warning ClassifierFailed cluster " + cluster.Namespace + "/" + cluster.Name + ": failed to deploy CRDs")))
+		})
+
+		It("records nothing when the agent of the cluster is not healthy: that is reported once per cluster", func() {
+			controllers.RecordDeploymentFailure(reconciler, classifier, cluster,
+				clusterInfo(libsveltosv1beta1.SveltosStatusFailedNonRetriable,
+					message("agent in managed cluster is not healthy.")))
+
+			Expect(recorder.Events).To(BeEmpty())
+		})
+
+		It("records nothing while the deployment is in progress, even with a message", func() {
+			controllers.RecordDeploymentFailure(reconciler, classifier, cluster,
+				clusterInfo(libsveltosv1beta1.SveltosStatusProvisioning, message("cleanup is in progress")))
+
+			Expect(recorder.Events).To(BeEmpty())
+		})
+
+		It("records nothing when there is no failure message", func() {
+			controllers.RecordDeploymentFailure(reconciler, classifier, cluster,
+				clusterInfo(libsveltosv1beta1.SveltosStatusFailed, message("")))
+			controllers.RecordDeploymentFailure(reconciler, classifier, cluster,
+				clusterInfo(libsveltosv1beta1.SveltosStatusFailed, nil))
+
+			Expect(recorder.Events).To(BeEmpty())
+		})
+	})
+})
+
+var _ = Describe("ManagementClusterClassifier events", func() {
+	It("records a Warning ClassifierFailed event when the classification script cannot run", func() {
+		mcc := &libsveltosv1beta1.ManagementClusterClassifier{
+			ObjectMeta: metav1.ObjectMeta{Name: randomString()},
+			Spec: libsveltosv1beta1.ManagementClusterClassifierSpec{
+				ClassificationLua: "not valid lua !@#",
+				ClassifierLabels: []libsveltosv1beta1.ClassifierLabel{
+					{Key: testLabelEnv, Value: testValueProd},
+				},
+			},
+		}
+
+		fakeClient := fake.NewClientBuilder().
+			WithScheme(mgmtTestScheme()).
+			WithObjects(mcc).
+			Build()
+
+		recorder := events.NewFakeRecorder(eventBufferSize)
+		reconciler := &controllers.ManagementClusterClassifierReconciler{
+			Client:        fakeClient,
+			EventRecorder: recorder,
+		}
+
+		_, err := reconciler.Reconcile(context.TODO(),
+			ctrl.Request{NamespacedName: types.NamespacedName{Name: mcc.Name}})
+		Expect(err).ToNot(HaveOccurred())
+
+		var recorded string
+		Expect(recorder.Events).To(Receive(&recorded))
+		Expect(recorded).To(HavePrefix("Warning ClassifierFailed failed to build cluster sets: "))
+	})
+})
diff --git a/controllers/export_test.go b/controllers/export_test.go
index 54d7860..f24ca7d 100644
--- a/controllers/export_test.go
+++ b/controllers/export_test.go
@@ -89,6 +89,13 @@ var (
 	CleanUpNonMatchingClusters             = (*ClassifierReconciler).cleanUpNonMatchingClusters
 	RemoveStaleLabelsFromMatchingClusters  = (*ClassifierReconciler).removeStaleLabelsFromMatchingClusters
 	CleanUpManagedResources                = (*ClassifierReconciler).cleanUpManagedResources
+	RecordDeploymentFailure                = (*ClassifierReconciler).recordDeploymentFailure
+	RecordReconcileFailure                 = (*ClassifierReconciler).recordReconcileFailure
+)
+
+var (
+	RecordWarningf     = recordWarningf
+	UnmanagedLabelKeys = unmanagedLabelKeys
 )
 
 var (
diff --git a/controllers/mgmtcluster_classifier_controller.go b/controllers/mgmtcluster_classifier_controller.go
index e3b9618..0ec5c04 100644
--- a/controllers/mgmtcluster_classifier_controller.go
+++ b/controllers/mgmtcluster_classifier_controller.go
@@ -28,6 +28,7 @@ import (
 	"k8s.io/apimachinery/pkg/apis/meta/v1/unstructured"
 	"k8s.io/apimachinery/pkg/runtime"
 	"k8s.io/apimachinery/pkg/runtime/schema"
+	"k8s.io/client-go/tools/events"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/builder"
 	"sigs.k8s.io/controller-runtime/pkg/client"
@@ -39,6 +40,7 @@ import (
 
 	"github.com/projectsveltos/classifier/controllers/keymanager"
 	libsveltosv1beta1 "github.com/projectsveltos/libsveltos/api/v1beta1"
+	"github.com/projectsveltos/libsveltos/lib/eventreasons"
 	logs "github.com/projectsveltos/libsveltos/lib/logsettings"
 	libsveltosset "github.com/projectsveltos/libsveltos/lib/set"
 )
@@ -66,6 +68,9 @@ type ManagementClusterClassifierReconciler struct {
 	watchedGVKs    map[schema.GroupVersionKind]bool
 	watchedGVKsMux sync.RWMutex
 
+	// EventRecorder is used to record events on ManagementClusterClassifier instances. No event is recorded when nil.
+	EventRecorder events.EventRecorder
+
 	Logger logr.Logger
 }
 
@@ -122,6 +127,7 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 	if err != nil {
 		logger.V(logs.LogInfo).Error(err, "failed to build cluster sets")
 		_ = setMgmtClassifierFailureMessage(ctx, r.Client, mcc, err.Error())
+		r.recordReconcileFailure(mcc, "build cluster sets", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 	trackMgmtClusterMatchingClusters(mcc.Name, len(newClusters), logger)
@@ -129,6 +135,7 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 	km, err := keymanager.GetKeyManagerInstance(ctx, r.Client)
 	if err != nil {
 		logger.V(logs.LogInfo).Error(err, "failed to get keymanager")
+		r.recordReconcileFailure(mcc, "get keymanager", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
@@ -137,12 +144,54 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 	// Remove labels from clusters that are no longer matched and delete their reports.
 	if err := r.removeStaleClusterLabels(ctx, fakeClassifier, mcc.Name, oldClusters, newClusters, logger); err != nil {
 		logger.V(logs.LogInfo).Error(err, "failed to remove stale cluster labels")
+		r.recordReconcileFailure(mcc, "remove stale cluster labels", err)
 		return reconcile.Result{RequeueAfter: normalRequeueAfter}, nil
 	}
 
+	conflictCount := r.applyLabelsToMatchingClusters(ctx, mcc, fakeClassifier, km, newClusters, logger)
+	trackMgmtClusterLabelConflicts(mcc.Name, conflictCount, logger)
+
+	// Update failure message: Lua errors plus any recorded conflicts.
+	failMsg := strings.Join(luaFailures, "; ")
+	if err := setMgmtClassifierFailureMessage(ctx, r.Client, mcc, failMsg); err != nil {
+		logger.V(logs.LogInfo).Error(err, "failed to update failure message")
+	}
+	if failMsg != "" {
+		recordWarningf(r.EventRecorder, mcc, eventreasons.ClassifierFailed, eventreasons.ActionEvaluating,
+			"failed to evaluate matching resources: %s", failMsg)
+	}
+
+	// Sync GVK map and register dynamic watches for spec.matchResources.
+	r.syncGVKWatches(mcc, logger)
+
+	if conflictCount > 0 {
+		return reconcile.Result{RequeueAfter: conflictRequeueAfter}, nil
+	}
+
+	logger.V(logs.LogDebug).Info("Reconcile success")
+	return reconcile.Result{}, nil
+}
+
+// mgmtLabelKeyManager is the part of the label key manager used to register the labels of a
+// ManagementClusterClassifier on a cluster and to find out which of them it can manage.
+type mgmtLabelKeyManager interface {
+	RemoveStaleRegistrations(*libsveltosv1beta1.Classifier, string, string, libsveltosv1beta1.ClusterType)
+	RegisterClassifierForLabels(*libsveltosv1beta1.Classifier, string, string, libsveltosv1beta1.ClusterType)
+	CanManageLabel(*libsveltosv1beta1.Classifier, string, string, string, libsveltosv1beta1.ClusterType) bool
+	GetManagerForKey(string, string, string, libsveltosv1beta1.ClusterType) (string, error)
+}
+
+// applyLabelsToMatchingClusters registers the labels of the ManagementClusterClassifier on each matching
+// cluster, updates the report of the cluster and applies the labels the classifier can manage.
+// It returns the number of clusters where at least one label is already managed by another classifier.
+func (r *ManagementClusterClassifierReconciler) applyLabelsToMatchingClusters(
+	ctx context.Context, mcc *libsveltosv1beta1.ManagementClusterClassifier,
+	fakeClassifier *libsveltosv1beta1.Classifier, km mgmtLabelKeyManager,
+	newClusters map[string]clusterRef, logger logr.Logger,
+) int {
+
 	conflictCount := 0
 
-	// Apply labels to newly matched clusters.
 	for key, ref := range newClusters {
 		clusterType, err := clusterTypeFromKind(ref.Kind)
 		if err != nil {
@@ -152,6 +201,7 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 		report, err := ensureMgmtClassifierReport(ctx, r.Client, mcc.Name, ref.Namespace, ref.Name, clusterType)
 		if err != nil {
 			logger.V(logs.LogInfo).Error(err, fmt.Sprintf("failed to ensure report for cluster %s", key))
+			r.recordReconcileFailure(mcc, fmt.Sprintf("ensure report for cluster %s", key), err)
 			continue
 		}
 
@@ -163,10 +213,14 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 
 		if len(unmanaged) > 0 {
 			conflictCount++
+			recordWarningf(r.EventRecorder, mcc, eventreasons.ClassifierLabelConflict, eventreasons.ActionReconciling,
+				"cluster %s/%s: label keys %s are managed by another Classifier",
+				ref.Namespace, ref.Name, unmanagedLabelKeys(unmanaged))
 		}
 
 		if err := updateMgmtClassifierReportStatus(ctx, r.Client, report, managed, unmanaged); err != nil {
 			logger.V(logs.LogInfo).Error(err, fmt.Sprintf("failed to update report status for cluster %s", key))
+			r.recordReconcileFailure(mcc, fmt.Sprintf("update report status for cluster %s", key), err)
 		}
 
 		labelsToApply := r.filterManagedLabels(mcc.Spec.ClassifierLabels, managed)
@@ -174,26 +228,22 @@ func (r *ManagementClusterClassifierReconciler) reconcileNormal(
 			labelsToApply, logger); err != nil {
 			if !apierrors.IsNotFound(err) {
 				logger.V(logs.LogInfo).Error(err, fmt.Sprintf("failed to apply labels to cluster %s", key))
+				r.recordReconcileFailure(mcc, fmt.Sprintf("apply labels to cluster %s", key), err)
 			}
 		}
 	}
-	trackMgmtClusterLabelConflicts(mcc.Name, conflictCount, logger)
 
-	// Update failure message: Lua errors plus any recorded conflicts.
-	failMsg := strings.Join(luaFailures, "; ")
-	if err := setMgmtClassifierFailureMessage(ctx, r.Client, mcc, failMsg); err != nil {
-		logger.V(logs.LogInfo).Error(err, "failed to update failure message")
-	}
+	return conflictCount
+}
 
-	// Sync GVK map and register dynamic watches for spec.matchResources.
-	r.syncGVKWatches(mcc, logger)
+// recordReconcileFailure records a Warning event on the ManagementClusterClassifier for a reconcile step
+// that failed. Those errors are only logged and the reconciler retries, so without the event the
+// failure is not visible to the user.
+func (r *ManagementClusterClassifierReconciler) recordReconcileFailure(mcc *libsveltosv1beta1.ManagementClusterClassifier,
+	step string, err error) {
 
-	if conflictCount > 0 {
-		return reconcile.Result{RequeueAfter: conflictRequeueAfter}, nil
-	}
-
-	logger.V(logs.LogDebug).Info("Reconcile success")
-	return reconcile.Result{}, nil
+	recordWarningf(r.EventRecorder, mcc, eventreasons.ClassifierFailed, eventreasons.ActionReconciling,
+		"failed to %s: %v", step, err)
 }
 
 func (r *ManagementClusterClassifierReconciler) reconcileDelete(
diff --git a/go.mod b/go.mod
index 62b398d..07cad33 100644
--- a/go.mod
+++ b/go.mod
@@ -9,7 +9,7 @@ require (
 	github.com/onsi/ginkgo/v2 v2.33.0
 	github.com/onsi/gomega v1.44.0
 	github.com/pkg/errors v0.9.1
-	github.com/projectsveltos/libsveltos v1.16.0
+	github.com/projectsveltos/libsveltos v1.16.1-0.20261011120654-3d6f8446a989
 	github.com/prometheus/client_golang v1.24.1
 	github.com/spf13/pflag v1.0.10
 	github.com/yuin/gopher-lua v1.1.2
diff --git a/go.sum b/go.sum
index 1ad48e2..07ed008 100644
--- a/go.sum
+++ b/go.sum
@@ -208,8 +208,8 @@ github.com/pkg/errors v0.9.1/go.mod h1:bwawxfHBFNV+L2hUp1rHADufV3IMtnDRdf1r5NINE
 github.com/pmezard/go-difflib v1.0.0/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
 github.com/pmezard/go-difflib v1.0.1-0.20181226105442-5d4384ee4fb2 h1:Jamvg5psRIccs7FGNTlIRMkT8wgtp5eCXdBlqhYGL6U=
 github.com/pmezard/go-difflib v1.0.1-0.20181226105442-5d4384ee4fb2/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
-github.com/projectsveltos/libsveltos v1.16.0 h1:XdmoMatjwU1a2Ede0FY5eddxlvD4CGx7Bse+VZ7qxFc=
-github.com/projectsveltos/libsveltos v1.16.0/go.mod h1:wup25BAf1SHuG6FsY8D+tnm1U3/3NiuzcKec/In/fB4=
+github.com/projectsveltos/libsveltos v1.16.1-0.20261011120654-3d6f8446a989 h1:jVCF78Z8fn6bQhDlf4QqTe7tsZEQ0jxM6ApgI0MR6n8=
+github.com/projectsveltos/libsveltos v1.16.1-0.20261011120654-3d6f8446a989/go.mod h1:wup25BAf1SHuG6FsY8D+tnm1U3/3NiuzcKec/In/fB4=
 github.com/projectsveltos/lua-utils/glua-json v0.0.0-20251212200258-2b3cdcb7c0f5 h1:khnc+994UszxZYu69J+R5FKiLA/Nk1JQj0EYAkwTWz0=
 github.com/projectsveltos/lua-utils/glua-json v0.0.0-20251212200258-2b3cdcb7c0f5/go.mod h1:yVL8KQFa9tmcxgwl9nwIMtKgtmIVC1zaFRSCfOwYvPY=
 github.com/projectsveltos/lua-utils/glua-runes v0.0.0-20251212200258-2b3cdcb7c0f5 h1:YbsebwRwTRhV8QacvEAdFqxcxHdeu7JTVtsBovbkgos=
diff --git a/main.go b/main.go
index 5ee3e41..b723918 100644
--- a/main.go
+++ b/main.go
@@ -381,6 +381,7 @@ func getMgmtClassifierReconciler(mgr manager.Manager) *controllers.ManagementClu
 		Scheme:           mgr.GetScheme(),
 		ShardKey:         shardKey,
 		GVKToClassifiers: make(map[schema.GroupVersionKind]*libsveltosset.Set),
+		EventRecorder:    mgr.GetEventRecorder("event-recorder"),
 		Logger:           ctrl.Log.WithName("managementclusterclassifierreconciler"),
 	}
 }
@@ -398,6 +399,7 @@ func getClassifierReconciler(mgr manager.Manager) *controllers.ClassifierReconci
 		ClassifierReportMode:  reportMode,
 		ControlPlaneEndpoint:  managementClusterControlPlaneEndpoint,
 		Mux:                   sync.Mutex{},
+		EventRecorder:         mgr.GetEventRecorder("event-recorder"),
 		Logger:                ctrl.Log.WithName("classifierreconiler"),
 	}
 }
diff --git a/manifest/deployment-agentless.yaml b/manifest/deployment-agentless.yaml
index ee08af7..cf76e69 100644
--- a/manifest/deployment-agentless.yaml
+++ b/manifest/deployment-agentless.yaml
@@ -26,7 +26,7 @@ spec:
         - --shard-key=
         - --capi-onboard-annotation=
         - --v=5
-        - --version=v1.16.0
+        - --version=main
         - --registry=
         - --agent-in-mgmt-cluster=true
         command:
@@ -44,7 +44,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         livenessProbe:
           failureThreshold: 3
@@ -92,7 +92,7 @@ spec:
               fieldPath: metadata.namespace
         - name: IS_INITIALIZATION
           value: "true"
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         name: migrate
         resources:
diff --git a/manifest/deployment-shard.yaml b/manifest/deployment-shard.yaml
index 616e7ff..dc207b7 100644
--- a/manifest/deployment-shard.yaml
+++ b/manifest/deployment-shard.yaml
@@ -26,7 +26,7 @@ spec:
         - --shard-key={{.SHARD}}
         - --capi-onboard-annotation=
         - --v=5
-        - --version=v1.16.0
+        - --version=main
         - --registry=
         - --agent-in-mgmt-cluster=false
         command:
@@ -44,7 +44,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         livenessProbe:
           failureThreshold: 3
@@ -92,7 +92,7 @@ spec:
               fieldPath: metadata.namespace
         - name: IS_INITIALIZATION
           value: "true"
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         name: migrate
         resources:
diff --git a/manifest/manifest.yaml b/manifest/manifest.yaml
index 0831049..5c11792 100644
--- a/manifest/manifest.yaml
+++ b/manifest/manifest.yaml
@@ -81,6 +81,14 @@ rules:
   - get
   - list
   - watch
+- apiGroups:
+  - events.k8s.io
+  resources:
+  - events
+  verbs:
+  - create
+  - patch
+  - update
 - apiGroups:
   - lib.projectsveltos.io
   resources:
@@ -259,7 +267,7 @@ spec:
         - --shard-key=
         - --capi-onboard-annotation=
         - --v=5
-        - --version=v1.16.0
+        - --version=main
         - --registry=
         - --agent-in-mgmt-cluster=false
         command:
@@ -277,7 +285,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         livenessProbe:
           failureThreshold: 3
@@ -325,7 +333,7 @@ spec:
               fieldPath: metadata.namespace
         - name: IS_INITIALIZATION
           value: "true"
-        image: docker.io/projectsveltos/classifier:v1.16.0
+        image: docker.io/projectsveltos/classifier:main
         imagePullPolicy: IfNotPresent
         name: migrate
         resources:
diff --git a/pkg/agent/sveltos-agent-in-mgmt-cluster.go b/pkg/agent/sveltos-agent-in-mgmt-cluster.go
index cc145f3..d163c72 100644
--- a/pkg/agent/sveltos-agent-in-mgmt-cluster.go
+++ b/pkg/agent/sveltos-agent-in-mgmt-cluster.go
@@ -42,7 +42,7 @@ spec:
         - --cluster-namespace=
         - --cluster-name=
         - --cluster-type=
-        - --version=v1.16.0
+        - --version=main
         - --current-cluster=management-cluster
         - --run-mode=do-not-send-reports
         - --discard-managed-fields=true
@@ -63,7 +63,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-agent@sha256:879d47e86797a36df50f984ca43b5d75a2da39bb8c36bc8f665d239ea9f29bfc
+        image: docker.io/projectsveltos/sveltos-agent@sha256:0bd50ceef7cb9599f5bbf57d07ad01fba2e8cf5d9650b2a3f41229ae30f6a55b
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/pkg/agent/sveltos-agent-in-mgmt-cluster.yaml b/pkg/agent/sveltos-agent-in-mgmt-cluster.yaml
index e4df6c2..7c57de0 100644
--- a/pkg/agent/sveltos-agent-in-mgmt-cluster.yaml
+++ b/pkg/agent/sveltos-agent-in-mgmt-cluster.yaml
@@ -24,7 +24,7 @@ spec:
         - --cluster-namespace=
         - --cluster-name=
         - --cluster-type=
-        - --version=v1.16.0
+        - --version=main
         - --current-cluster=management-cluster
         - --run-mode=do-not-send-reports
         - --discard-managed-fields=true
@@ -45,7 +45,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-agent@sha256:879d47e86797a36df50f984ca43b5d75a2da39bb8c36bc8f665d239ea9f29bfc
+        image: docker.io/projectsveltos/sveltos-agent@sha256:0bd50ceef7cb9599f5bbf57d07ad01fba2e8cf5d9650b2a3f41229ae30f6a55b
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/pkg/agent/sveltos-agent.go b/pkg/agent/sveltos-agent.go
index 939555c..67f987a 100644
--- a/pkg/agent/sveltos-agent.go
+++ b/pkg/agent/sveltos-agent.go
@@ -191,7 +191,7 @@ spec:
         - --cluster-namespace=
         - --cluster-name=
         - --cluster-type=
-        - --version=v1.16.0
+        - --version=main
         - --current-cluster=managed-cluster
         - --run-mode=do-not-send-reports
         - --discard-managed-fields=true
@@ -212,7 +212,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-agent@sha256:879d47e86797a36df50f984ca43b5d75a2da39bb8c36bc8f665d239ea9f29bfc
+        image: docker.io/projectsveltos/sveltos-agent@sha256:0bd50ceef7cb9599f5bbf57d07ad01fba2e8cf5d9650b2a3f41229ae30f6a55b
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/pkg/agent/sveltos-agent.yaml b/pkg/agent/sveltos-agent.yaml
index 4f9bd86..f59add6 100644
--- a/pkg/agent/sveltos-agent.yaml
+++ b/pkg/agent/sveltos-agent.yaml
@@ -173,7 +173,7 @@ spec:
         - --cluster-namespace=
         - --cluster-name=
         - --cluster-type=
-        - --version=v1.16.0
+        - --version=main
         - --current-cluster=managed-cluster
         - --run-mode=do-not-send-reports
         - --discard-managed-fields=true
@@ -194,7 +194,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-agent@sha256:879d47e86797a36df50f984ca43b5d75a2da39bb8c36bc8f665d239ea9f29bfc
+        image: docker.io/projectsveltos/sveltos-agent@sha256:0bd50ceef7cb9599f5bbf57d07ad01fba2e8cf5d9650b2a3f41229ae30f6a55b
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/pkg/agent/sveltos-applier.go b/pkg/agent/sveltos-applier.go
index f911721..bb68927 100644
--- a/pkg/agent/sveltos-applier.go
+++ b/pkg/agent/sveltos-applier.go
@@ -102,7 +102,7 @@ spec:
         - --secret-with-kubeconfig=
         - --watch-namespaces=
         - --v=5
-        - --version=v1.16.0
+        - --version=main
         command:
         - /manager
         env:
@@ -118,7 +118,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-applier@sha256:184195269045fce39e9f4e55591280a849ee373c62672624ce694f87ac70ae87
+        image: docker.io/projectsveltos/sveltos-applier@sha256:b2bc482858176524c7cd28e272794ced4156359bd58c1c21de043ac18c7e3221
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/pkg/agent/sveltos-applier.yaml b/pkg/agent/sveltos-applier.yaml
index c816b8b..f7aedb5 100644
--- a/pkg/agent/sveltos-applier.yaml
+++ b/pkg/agent/sveltos-applier.yaml
@@ -84,7 +84,7 @@ spec:
         - --secret-with-kubeconfig=
         - --watch-namespaces=
         - --v=5
-        - --version=v1.16.0
+        - --version=main
         command:
         - /manager
         env:
@@ -100,7 +100,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-applier@sha256:184195269045fce39e9f4e55591280a849ee373c62672624ce694f87ac70ae87
+        image: docker.io/projectsveltos/sveltos-applier@sha256:b2bc482858176524c7cd28e272794ced4156359bd58c1c21de043ac18c7e3221
         livenessProbe:
           failureThreshold: 3
           httpGet:
diff --git a/test/pullmode-sveltosapplier.yaml b/test/pullmode-sveltosapplier.yaml
index 6546dff..9c3adb6 100644
--- a/test/pullmode-sveltosapplier.yaml
+++ b/test/pullmode-sveltosapplier.yaml
@@ -100,7 +100,7 @@ spec:
           valueFrom:
             fieldRef:
               fieldPath: metadata.namespace
-        image: docker.io/projectsveltos/sveltos-applier@sha256:184195269045fce39e9f4e55591280a849ee373c62672624ce694f87ac70ae87
+        image: docker.io/projectsveltos/sveltos-applier@sha256:b2bc482858176524c7cd28e272794ced4156359bd58c1c21de043ac18c7e3221
         livenessProbe:
           failureThreshold: 3
           httpGet: