diff --git a/nix/services/postgres/bad_test.sql b/nix/services/postgres/bad_test.sql
new file mode 100644
index 00000000..cbc29ee5
--- /dev/null
+++ b/nix/services/postgres/bad_test.sql
@@ -0,0 +1,3 @@
+-- Tests if the postgres process gets skipped when there is an error while setting up inital databases
+CREATE STABLE users (id INT PRIMARY KEY, user_name VARCHAR(25));
+
diff --git a/nix/services/postgres/postgres_test.nix b/nix/services/postgres/postgres_test.nix
index 1adf9789..c3ad015e 100644
--- a/nix/services/postgres/postgres_test.nix
+++ b/nix/services/postgres/postgres_test.nix
@@ -1,4 +1,4 @@
-{ pkgs, config, ... }: {
+{ pkgs, config, name, ... }: {
   services.postgres."pg1" = {
     enable = true;
     initialScript.before = "CREATE USER bar;";
@@ -26,16 +26,31 @@
       }
     ];
   };
+
+  # Tests if `pg4-init` fails due to `./bad_test.sql`
+  services.postgres."pg4" = {
+    enable = true;
+    socketDir = "./test/new/socket/path3";
+    listen_addresses = "";
+    initialDatabases = [
+      {
+        name = "test-db";
+        schemas = [ ./bad_test.sql ];
+      }
+    ];
+  };
   # avoid both the processes trying to create `data` directory at the same time
   settings.processes."pg2-init".depends_on."pg1-init".condition = "process_completed_successfully";
   settings.processes."pg3-init".depends_on."pg2-init".condition = "process_completed_successfully";
+  settings.processes."pg4-init".depends_on."pg3-init".condition = "process_completed_successfully";
+
   settings.processes.test =
     let
       cfg = config.services.postgres."pg1";
     in
     {
       command = pkgs.writeShellApplication {
-        runtimeInputs = [ cfg.package pkgs.gnugrep ];
+        runtimeInputs = [ cfg.package pkgs.gnugrep pkgs.curl pkgs.jq ];
         text = ''
           echo 'SELECT version();' | psql -h 127.0.0.1
           echo 'SHOW hba_file;' | psql -h 127.0.0.1 | ${pkgs.gawk}/bin/awk 'NR==3' | grep '^ /nix/store'
@@ -48,9 +63,17 @@
 
           # schemas test
           echo "SELECT * from users where user_name = 'test_user';" | psql -h 127.0.0.1 -p 5433 -d sample-db | grep -q test_user
-         
+ 
           # listen_addresses test
           echo "SELECT 1 FROM pg_database where datname = 'test-db';" | psql -h "$(readlink -f ${config.services.postgres.pg3.socketDir})" -d postgres | grep -q 1
+
+          # Test if `pg4-init` fails due to `bad_test.sql`
+          #
+          # The curl to process-compose server is documented in the swagger URL, http://localhost:8080, but since we are listening on unix socket here, you can use `socat` to temporarily pipe the port `8080` to the `pc-${name}.sock` (`socat TCP-LISTEN:8080,fork UNIX-CONNECT:/path/to/your/socket.sock
+ 
+          # OpenAPI documentation from the swagger URL:
+          # /process/logs/{name}/{endOffset}/{limit}
+          curl --unix-socket pc-${name}.sock http://localhost/process/logs/pg4-init/30/0 | jq '.logs | contains(["ERROR:  syntax error at or near \"STABLE\""])' | grep "true"
         '';
         name = "postgres-test";
       };
diff --git a/test/flake.lock b/test/flake.lock
index 12a8dae8..19d690e9 100644
--- a/test/flake.lock
+++ b/test/flake.lock
@@ -48,11 +48,11 @@
     },
     "process-compose-flake": {
       "locked": {
-        "lastModified": 1727723765,
-        "narHash": "sha256-/3az0h2Zp02bjJQKliR0PEQiT+FMLOR1GumhH42jA4w=",
+        "lastModified": 1729544733,
+        "narHash": "sha256-ir7WTVpG999N07wkOCs1kwZsQKitOv3CNDqNalCMK3c=",
         "owner": "Platonic-Systems",
         "repo": "process-compose-flake",
-        "rev": "22f2aeb7e0b88006d1d27065f8422f2790d99e47",
+        "rev": "7241e6b247b65cfa579d6f838a8efc18e5401924",
         "type": "github"
       },
       "original": {
diff --git a/test/flake.nix b/test/flake.nix
index f5a43b54..fbb1f732 100644
--- a/test/flake.nix
+++ b/test/flake.nix
@@ -30,6 +30,12 @@
                   inputs.services-flake.processComposeModules.default
                   mod
                 ];
+                cli = {
+                  options = {
+                    use-uds = true;
+                    unix-socket = "pc-${name}.sock";
+                  };
+                };
               };
           in
           builtins.listToAttrs (builtins.map mkPackageFor ([