diff --git a/policy/file/source.go b/policy/file/source.go
index 6b593da9..e1e970cc 100644
--- a/policy/file/source.go
+++ b/policy/file/source.go
@@ -104,8 +104,11 @@ func (s *Source) ReloadIDsMonitor() {
 	<-s.reloadCompleteCh
 }
 
-// MonitorPolicy satisfies the MonitorPolicy function of the policy.Source
-// interface.
+// MonitorPolicy reads policy from a file on disk and writes it to req.ResultCh.
+// Any error doing so will be sent to req.ErrCh.
+// If MonitorPolicy receives on s.ReloadCh, it will re-check the file on disk,
+// and write again to req.ResultCh if the policy has changed.
+// Note: MonitorPolicy should only return when ctx is done.
 func (s *Source) MonitorPolicy(ctx context.Context, req policy.MonitorPolicyReq) {
 
 	// Close channels when done with the monitoring loop.
@@ -134,12 +137,12 @@ func (s *Source) MonitorPolicy(ctx context.Context, req policy.MonitorPolicyReq)
 		p, _, err := s.handleIndividualPolicyRead(req.ID, file, name)
 		if err != nil {
 			policy.HandleSourceError(s.Name(), fmt.Errorf("failed to get policy %s: %w", req.ID, err), req.ErrCh)
-			return
+		} else {
+			s.policyMap[req.ID] = &filePolicy{file: file, name: name, policy: p}
+			// We must send to ResultCh each time a Handler invokes this method,
+			// or the Handler will error "failed to read policy in time"
+			req.ResultCh <- *p
 		}
-		s.policyMap[req.ID] = &filePolicy{file: file, name: name, policy: p}
-		// We must send to ResultCh each time a Handler invokes this method,
-		// or the Handler will error "failed to read policy in time"
-		req.ResultCh <- *p
 	}
 	s.policyMapLock.Unlock()
 
diff --git a/policy/file/source_test.go b/policy/file/source_test.go
index 5baf4bfd..09d8bcea 100644
--- a/policy/file/source_test.go
+++ b/policy/file/source_test.go
@@ -160,3 +160,53 @@ func TestSource_MonitorPolicy(t *testing.T) {
 		cancel()
 	}
 }
+
+func TestSource_MonitorPolicy_ContinueOnError(t *testing.T) {
+	// start with a happy source
+	src, ids := testFileSource(t, "./test-fixtures")
+	pid := ids[0]
+
+	// then break it
+	src.policyMap[pid].file = "/nowhere"
+
+	errCh := make(chan error)
+	resultCh := make(chan sdk.ScalingPolicy)
+	reloadCh := make(chan struct{}, 1)
+	req := policy.MonitorPolicyReq{
+		ID:       pid,
+		ErrCh:    errCh,
+		ResultCh: resultCh,
+		ReloadCh: reloadCh,
+	}
+
+	// done chan separate from ctx to ensure the goroutine completes
+	done := make(chan struct{})
+
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	go func() {
+		src.MonitorPolicy(ctx, req)
+
+		select {
+		case <-ctx.Done():
+			t.Logf("good, context done")
+		default:
+			t.Error("MonitorPolicy should only return if the context is done")
+		}
+
+		close(done)
+	}()
+
+	select {
+	case <-time.After(time.Millisecond * 200):
+		t.Fatal("no error in time")
+	case err := <-errCh:
+		t.Logf("good show, got error as expected: %v", err)
+	case i := <-resultCh:
+		t.Fatalf("not expecting a policy, got: %+v", i)
+	}
+
+	cancel()
+	<-done
+}