diff --git a/internal/controller/reconcile-domain.go b/internal/controller/reconcile-domain.go
index cd80f45f..f37c3a0a 100644
--- a/internal/controller/reconcile-domain.go
+++ b/internal/controller/reconcile-domain.go
@@ -134,10 +134,13 @@ func reconcileDomainEntity[T v1alpha1.DomainEntity](ctx context.Context, c *Cont
 		return handleDomainResourceDeletion(ctx, c, dom)
 	}
 
-	if dom.GetStatus().State != v1alpha1.DomainStateProcessing {
-		// set processing status
+	if dom.GetStatus().State == "" {
+		// When no status state is set, we set it to processing state first and requeue for processing.
 		dom.SetStatusWithReadyCondition(v1alpha1.DomainStateProcessing, metav1.ConditionFalse, "Processing", "Processing domain resources")
 		return NewReconcileResultWithResource(getResourceKeyFromKind(dom), dom.GetName(), dom.GetNamespace(), 0), nil
+	} else if dom.GetStatus().State != v1alpha1.DomainStateProcessing {
+		// If not in processing state, we set it to processing state first and continue without requeuing. This ensures Error scenarios (if any) stay rate limited.
+		dom.SetStatusWithReadyCondition(v1alpha1.DomainStateProcessing, metav1.ConditionFalse, "Processing", "Processing domain resources")
 	}
 
 	defer func() {
diff --git a/internal/controller/reconcile-domain_test.go b/internal/controller/reconcile-domain_test.go
index aa40bbdb..65cdf33c 100644
--- a/internal/controller/reconcile-domain_test.go
+++ b/internal/controller/reconcile-domain_test.go
@@ -41,6 +41,25 @@ func TestDomain_InitialState(t *testing.T) {
 	)
 }
 
+func TestDomain_ProcessingWithError(t *testing.T) {
+	err := reconcileTestItem(
+		context.TODO(), t,
+		QueueItem{Key: ResourceDomain, ResourceKey: NamespacedResourceKey{Namespace: "default", Name: "test-cap-01-primary"}},
+		TestData{
+			description: "Processing with ingress error",
+			initialResources: []string{
+				"testdata/domain/domain-no-ingress-error.yaml",
+			},
+			expectedResources: "testdata/domain/domain-no-ingress-error.yaml",
+			expectError:       true,
+		},
+	)
+
+	if err.Error() != "failed to get ingress information for Domain.default.test-cap-01-primary: no matching ingress gateway pods found matching selector from Domain.default.test-cap-01-primary" {
+		t.Error("Wrong error message")
+	}
+}
+
 func TestDomain_ProcessingWithoutIngress(t *testing.T) {
 	err := reconcileTestItem(
 		context.TODO(), t,