diff --git a/core/common/lib/state-machine-lib/src/main/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcess.java b/core/common/lib/state-machine-lib/src/main/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcess.java
index a0782d4a592..41661203b44 100644
--- a/core/common/lib/state-machine-lib/src/main/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcess.java
+++ b/core/common/lib/state-machine-lib/src/main/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcess.java
@@ -24,6 +24,7 @@
 import java.util.function.Supplier;
 
 import static java.lang.String.format;
+import static org.eclipse.edc.spi.response.ResponseStatus.FATAL_ERROR;
 
 /**
  * Provides retry capabilities to a synchronous process that returns a {@link StatusResult} object
@@ -45,7 +46,13 @@ public StatusResultRetryProcess(E entity, Supplier<StatusResult<C>> process, Mon
     @Override
     boolean process(E entity, String description) {
         monitor.debug(format("%s: ID %s. %s", entity.getClass().getSimpleName(), entity.getId(), description));
-        var result = process.get();
+
+        StatusResult<C> result;
+        try {
+            result = process.get();
+        } catch (Exception e) {
+            result = StatusResult.failure(FATAL_ERROR, "Unexpected exception thrown %s: %s".formatted(e, e.getMessage()));
+        }
 
         handleResult(entity, description, result);
 
diff --git a/core/common/lib/state-machine-lib/src/test/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcessTest.java b/core/common/lib/state-machine-lib/src/test/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcessTest.java
index 0153ce6c039..ae9758ecba8 100644
--- a/core/common/lib/state-machine-lib/src/test/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcessTest.java
+++ b/core/common/lib/state-machine-lib/src/test/java/org/eclipse/edc/statemachine/retry/StatusResultRetryProcessTest.java
@@ -14,6 +14,7 @@
 
 package org.eclipse.edc.statemachine.retry;
 
+import org.eclipse.edc.spi.EdcException;
 import org.eclipse.edc.spi.monitor.Monitor;
 import org.eclipse.edc.spi.response.ResponseFailure;
 import org.eclipse.edc.spi.response.StatusResult;
@@ -29,8 +30,11 @@
 import static org.assertj.core.api.Assertions.assertThat;
 import static org.eclipse.edc.spi.response.ResponseStatus.ERROR_RETRY;
 import static org.eclipse.edc.spi.response.ResponseStatus.FATAL_ERROR;
+import static org.mockito.ArgumentMatchers.any;
+import static org.mockito.ArgumentMatchers.same;
 import static org.mockito.Mockito.mock;
 import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.verifyNoInteractions;
 import static org.mockito.Mockito.when;
 
 class StatusResultRetryProcessTest {
@@ -93,4 +97,19 @@ void shouldExecuteOnRetry_whenFailureAndRetriesHaveNotBeenExhausted() {
 
         verify(onFailure).accept(entity, statusResult.getFailure());
     }
+
+
+    @Test
+    void shouldCallFatalError_whenExceptionIsThrown() {
+        when(process.get()).thenThrow(new EdcException("code throws an exception"));
+        var entity = TestEntity.Builder.newInstance().id(UUID.randomUUID().toString()).clock(clock).build();
+        var retryProcess = new StatusResultRetryProcess<>(entity, process, mock(Monitor.class), clock, configuration);
+
+        var result = retryProcess.onSuccess(onSuccess).onFatalError(onFatalError).execute("any");
+
+        assertThat(result).isTrue();
+        verify(process).get();
+        verify(onFatalError).accept(same(entity), any());
+        verifyNoInteractions(onSuccess);
+    }
 }