diff --git a/litellm/integrations/prometheus.py b/litellm/integrations/prometheus.py
index c7bf291a887..978cc549dea 100644
--- a/litellm/integrations/prometheus.py
+++ b/litellm/integrations/prometheus.py
@@ -3252,6 +3252,16 @@ class PrometheusLogger(CustomLogger):
         except Exception as e:
             verbose_logger.debug("Error recording guardrail metrics: %s", e)
 
+    def record_guardrail_fail_open(self, guardrail_name: str, hook_type: str) -> None:
+        try:
+            self.litellm_guardrail_errors_total.labels(
+                guardrail_name=guardrail_name,
+                error_type="fail_open",
+                hook_type=hook_type,
+            ).inc()
+        except Exception as e:
+            verbose_logger.debug("Error recording guardrail fail-open metric: %s", e)
+
     ########################################
     # Managed Batch Metric Recording Methods
     ########################################
diff --git a/litellm/proxy/_lazy_openapi_snapshot.json b/litellm/proxy/_lazy_openapi_snapshot.json
index 3d44315341b..3842a5cb504 100644
--- a/litellm/proxy/_lazy_openapi_snapshot.json
+++ b/litellm/proxy/_lazy_openapi_snapshot.json
@@ -10405,14 +10405,20 @@
               "title": "Timeout"
             },
             "unreachable_fallback": {
-              "default": "fail_closed",
-              "description": "Behavior when a guardrail endpoint is unreachable due to network errors. Implemented by guardrail='generic_guardrail_api', 'agent_365', 'akto', 'vigil_guard', 'repelloai', 'headroom', 'compresr', and 'typesafe'. 'fail_closed' raises an error (default). 'fail_open' logs a critical error and allows the request to proceed.",
-              "enum": [
-                "fail_closed",
-                "fail_open"
+              "anyOf": [
+                {
+                  "enum": [
+                    "fail_closed",
+                    "fail_open"
+                  ],
+                  "type": "string"
+                },
+                {
+                  "type": "null"
+                }
               ],
-              "title": "Unreachable Fallback",
-              "type": "string"
+              "description": "Behavior when a guardrail endpoint is unreachable due to network errors. Implemented by guardrail='generic_guardrail_api', 'agent_365', 'akto', 'vigil_guard', 'repelloai', 'headroom', 'compresr', and 'typesafe'. 'fail_closed' raises an error. 'fail_open' logs a critical error and allows the request to proceed. Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed.",
+              "title": "Unreachable Fallback"
             },
             "violation_message_template": {
               "anyOf": [
@@ -13261,14 +13267,20 @@
               "title": "Tracker Api Key"
             },
             "unreachable_fallback": {
-              "default": "fail_closed",
-              "description": "Behavior when the headroom compression service is unreachable or errors. 'fail_closed' raises an error (default). 'fail_open' logs a critical error and forwards the request uncompressed instead of blocking it.",
-              "enum": [
-                "fail_closed",
-                "fail_open"
+              "anyOf": [
+                {
+                  "enum": [
+                    "fail_closed",
+                    "fail_open"
+                  ],
+                  "type": "string"
+                },
+                {
+                  "type": "null"
+                }
               ],
-              "title": "Unreachable Fallback",
-              "type": "string"
+              "description": "Behavior when the guardrail endpoint is unreachable. 'fail_closed' blocks, 'fail_open' allows and logs. Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed.",
+              "title": "Unreachable Fallback"
             },
             "use_v2": {
               "anyOf": [
diff --git a/litellm/proxy/guardrails/guardrail_hooks/agent_365/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/agent_365/__init__.py
index 9aacdec0602..ef4b46e3dfd 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/agent_365/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/agent_365/__init__.py
@@ -46,7 +46,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
         resource_app_id=resource_app_id or AGENT_365_PROD_RESOURCE_APP_ID,
         agent_id=litellm_params.agent_id,
         request_timeout=litellm_params.timeout if litellm_params.timeout is not None else 10.0,
-        unreachable_fallback=litellm_params.unreachable_fallback,
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_open",
         event_hook=litellm_params.mode,
         default_on=litellm_params.default_on,
     )
diff --git a/litellm/proxy/guardrails/guardrail_hooks/agent_365/agent_365.py b/litellm/proxy/guardrails/guardrail_hooks/agent_365/agent_365.py
index 975d321104d..3d8007fc480 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/agent_365/agent_365.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/agent_365/agent_365.py
@@ -14,7 +14,7 @@ import threading
 import time
 import uuid
 from collections import OrderedDict
-from collections.abc import Mapping
+from collections.abc import Callable, Mapping
 from typing import TYPE_CHECKING, ClassVar, Final, Literal, NoReturn
 
 import httpx
@@ -22,12 +22,14 @@ from fastapi import HTTPException
 from pydantic import TypeAdapter, ValidationError
 from typing_extensions import ReadOnly, TypedDict
 
+import litellm
 from litellm._logging import verbose_proxy_logger
 from litellm.exceptions import Timeout as LitellmTimeout
 from litellm.integrations.custom_guardrail import (
     CustomGuardrail,
     log_guardrail_information,
 )
+from litellm.integrations.prometheus import PrometheusLogger
 from litellm.litellm_core_utils.litellm_logging import Logging as LiteLLMLoggingObj
 from litellm.llms.custom_httpx.http_handler import (
     AsyncHTTPHandler,
@@ -81,6 +83,10 @@ def _parse_aadsts_codes(raw: object) -> tuple[int, ...]:
         return ()
 
 
+def registered_prometheus_logger() -> PrometheusLogger | None:
+    return next((cb for cb in litellm.callbacks if isinstance(cb, PrometheusLogger)), None)
+
+
 def entra_assertion(value: object) -> str | None:
     """``value`` when it is a compact JWS, the only bearer shape the OBO exchange accepts as its assertion.
     A LiteLLM virtual key, session bearer, or opaque upstream token in ``Authorization`` yields ``None``."""
@@ -157,8 +163,9 @@ class Agent365Guardrail(CustomGuardrail):
         resource_app_id: str = AGENT_365_PROD_RESOURCE_APP_ID,
         agent_id: str | None = None,
         request_timeout: float = 10.0,
-        unreachable_fallback: Literal["fail_closed", "fail_open"] = "fail_closed",
+        unreachable_fallback: Literal["fail_closed", "fail_open"] = "fail_open",
         async_handler: AsyncHTTPHandler | None = None,
+        prometheus_logger_lookup: Callable[[], PrometheusLogger | None] = registered_prometheus_logger,
         **kwargs,  # noqa: ANN003  # kwargs-ok: forwarded verbatim to CustomGuardrail (event_hook, default_on)
     ) -> None:
         super().__init__(
@@ -176,11 +183,12 @@ class Agent365Guardrail(CustomGuardrail):
         self.agent_id = agent_id
         self.request_timeout = request_timeout
         self.unreachable_fallback: Literal["fail_closed", "fail_open"] = (
-            "fail_open" if unreachable_fallback == "fail_open" else "fail_closed"
+            "fail_closed" if unreachable_fallback == "fail_closed" else "fail_open"
         )
         self.async_handler = async_handler or get_async_httpx_client(
             llm_provider=httpxSpecialProvider.GuardrailCallback
         )
+        self._prometheus_logger_lookup = prometheus_logger_lookup
         self._obo_token_cache: OrderedDict[str, tuple[str, float]] = OrderedDict()  # mutable-ok: lock-guarded LRU
         self._obo_cache_lock = threading.Lock()
         verbose_proxy_logger.info("Initialized Microsoft Agent 365 guardrail: %s", guardrail_name)
@@ -575,12 +583,13 @@ class Agent365Guardrail(CustomGuardrail):
         latency_ms: float | None = None,
     ) -> dict:  # mutable-ok: returns the request data dict per hook contract
         if self.unreachable_fallback == "fail_open":
-            verbose_proxy_logger.warning(
+            verbose_proxy_logger.error(
                 "Agent 365 guardrail (%s): %s; unreachable_fallback='fail_open', allowing tool call '%s' unscanned",
                 self.guardrail_name,
                 reason,
                 tool_name,
             )
+            self._count_fail_open()
             self._record_verdict(
                 data=data,
                 verdict="Unscanned",
@@ -608,6 +617,13 @@ class Agent365Guardrail(CustomGuardrail):
         }
         raise HTTPException(status_code=503, detail=unavailable_detail)
 
+    def _count_fail_open(self) -> None:
+        prometheus: Final = self._prometheus_logger_lookup()
+        if prometheus is not None:
+            prometheus.record_guardrail_fail_open(
+                guardrail_name=self.guardrail_name or type(self).__name__, hook_type="pre_call"
+            )
+
     def _record_verdict(
         self,
         data: dict[str, object],  # mutable-ok: standard guardrail logging appends into the request metadata in place
diff --git a/litellm/proxy/guardrails/guardrail_hooks/akto/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/akto/__init__.py
index 1888b333748..8c3f22d3767 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/akto/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/akto/__init__.py
@@ -16,7 +16,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
         akto_api_key=getattr(litellm_params, "akto_api_key", None),
         akto_account_id=getattr(litellm_params, "akto_account_id", None),
         akto_vxlan_id=getattr(litellm_params, "akto_vxlan_id", None),
-        unreachable_fallback=getattr(litellm_params, "unreachable_fallback", "fail_closed"),
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         guardrail_timeout=getattr(litellm_params, "guardrail_timeout", None),
         guardrail_name=guardrail.get("guardrail_name", ""),
         event_hook=litellm_params.mode,
diff --git a/litellm/proxy/guardrails/guardrail_hooks/alice/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/alice/__init__.py
index 75ea16f7a88..7117dbb5b23 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/alice/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/alice/__init__.py
@@ -14,7 +14,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
     _alice_guardrail_callback: Final = AliceGuardrail(
         api_key=litellm_params.api_key,
         api_base=litellm_params.api_base,
-        unreachable_fallback=getattr(litellm_params, "unreachable_fallback", "fail_closed"),
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         guardrail_name=guardrail.get("guardrail_name", ""),
         event_hook=litellm_params.mode,
         default_on=litellm_params.default_on,
diff --git a/litellm/proxy/guardrails/guardrail_hooks/conduct/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/conduct/__init__.py
index 9eac143be88..07abc51672d 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/conduct/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/conduct/__init__.py
@@ -29,7 +29,7 @@ def initialize_guardrail(
         agent_token=litellm_params.api_key,
         workspace_id=extras.get("workspace_id"),
         tool_name=extras.get("tool_name", "llm_call"),
-        unreachable_fallback=litellm_params.unreachable_fallback,
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         timeout=DEFAULT_TIMEOUT_SECONDS if litellm_params.timeout is None else litellm_params.timeout,
         guardrail_name=guardrail.get("guardrail_name", ""),
         event_hook=litellm_params.mode,
diff --git a/litellm/proxy/guardrails/guardrail_hooks/deepkeep/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/deepkeep/__init__.py
index 3b73883d290..6eae31c86e2 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/deepkeep/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/deepkeep/__init__.py
@@ -15,7 +15,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
         api_base=litellm_params.api_base,
         api_key=litellm_params.api_key,
         firewall_id=getattr(litellm_params, "deepkeep_firewall_id", None),
-        unreachable_fallback=getattr(litellm_params, "unreachable_fallback", "fail_closed"),
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         extra_headers=getattr(litellm_params, "extra_headers", None),
         guardrail_name=guardrail.get("guardrail_name", ""),
         event_hook=litellm_params.mode,
diff --git a/litellm/proxy/guardrails/guardrail_hooks/generic_guardrail_api/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/generic_guardrail_api/__init__.py
index e3511d46544..7b02cf5b04f 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/generic_guardrail_api/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/generic_guardrail_api/__init__.py
@@ -30,7 +30,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
         api_key=litellm_params.api_key,
         headers=getattr(litellm_params, "headers", None),
         additional_provider_specific_params=getattr(litellm_params, "additional_provider_specific_params", {}),
-        unreachable_fallback=getattr(litellm_params, "unreachable_fallback", "fail_closed"),
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         fail_on_error=getattr(litellm_params, "fail_on_error", True),
         extra_headers=getattr(litellm_params, "extra_headers", None),
         guardrail_name=guardrail.get("guardrail_name", ""),
diff --git a/litellm/proxy/guardrails/guardrail_hooks/repelloai/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/repelloai/__init__.py
index 37788b35ec7..a20a3d8e1a9 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/repelloai/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/repelloai/__init__.py
@@ -30,7 +30,7 @@ def initialize_guardrail(litellm_params: "LitellmParams", guardrail: "Guardrail"
         api_key=litellm_params.api_key,
         api_base=litellm_params.api_base,
         asset_id=litellm_params.asset_id,
-        unreachable_fallback=litellm_params.unreachable_fallback,
+        unreachable_fallback=litellm_params.unreachable_fallback or "fail_closed",
         event_hook=_event_hook_from_mode(litellm_params.mode),
         default_on=litellm_params.default_on or False,
     )
diff --git a/litellm/proxy/guardrails/guardrail_hooks/typesafe/__init__.py b/litellm/proxy/guardrails/guardrail_hooks/typesafe/__init__.py
index dcea75d3a98..b521c2e03a3 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/typesafe/__init__.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/typesafe/__init__.py
@@ -55,9 +55,7 @@ def initialize_guardrail(litellm_params: LitellmParams, guardrail: Guardrail) ->
         guardrail_name=guardrail["guardrail_name"],
         event_hook=_coerce_event_hook(litellm_params.mode),
         default_on=litellm_params.default_on or False,
-        unreachable_fallback=(
-            litellm_params.unreachable_fallback if "unreachable_fallback" in litellm_params.model_fields_set else None
-        ),
+        unreachable_fallback=litellm_params.unreachable_fallback,
     )
     litellm.logging_callback_manager.add_litellm_callback(  # pyright: ignore[reportUnknownMemberType]  # callback manager is untyped
         _callback
diff --git a/litellm/types/guardrails.py b/litellm/types/guardrails.py
index 579a3f6322f..4a79f41b030 100644
--- a/litellm/types/guardrails.py
+++ b/litellm/types/guardrails.py
@@ -1055,12 +1055,13 @@ class BaseLitellmParams(ContentFilterConfigModel):  # works for new and patch up
         description="Additional provider-specific parameters for generic guardrail APIs",
     )
 
-    unreachable_fallback: Literal["fail_closed", "fail_open"] = Field(
-        default="fail_closed",
+    unreachable_fallback: Literal["fail_closed", "fail_open"] | None = Field(
+        default=None,
         description=(
             "Behavior when a guardrail endpoint is unreachable due to network errors. "
             "Implemented by guardrail='generic_guardrail_api', 'agent_365', 'akto', 'vigil_guard', 'repelloai', 'headroom', 'compresr', and 'typesafe'. "
-            "'fail_closed' raises an error (default). 'fail_open' logs a critical error and allows the request to proceed."
+            "'fail_closed' raises an error. 'fail_open' logs a critical error and allows the request to proceed. "
+            "Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed."
         ),
     )
 
@@ -1204,6 +1205,13 @@ class LitellmParams(  # pyright: ignore[reportIncompatibleVariableOverride]  # o
     mode: str | list[str] | Mode = Field(
         description="When to apply the guardrail (pre_call, post_call, during_call, logging_only)"
     )
+    unreachable_fallback: Literal["fail_closed", "fail_open"] | None = Field(  # pyright: ignore[reportIncompatibleVariableOverride]  # mixins pin a default; unset defers to the guardrail's own
+        default=None,
+        description=(
+            "Behavior when the guardrail endpoint is unreachable. 'fail_closed' blocks, 'fail_open' allows and logs. "
+            "Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed."
+        ),
+    )
 
     @field_validator("timeout", mode="before", check_fields=False)
     @classmethod
diff --git a/litellm/types/proxy/guardrails/guardrail_hooks/agent_365.py b/litellm/types/proxy/guardrails/guardrail_hooks/agent_365.py
index dd3d7fe5f74..83754df9c59 100644
--- a/litellm/types/proxy/guardrails/guardrail_hooks/agent_365.py
+++ b/litellm/types/proxy/guardrails/guardrail_hooks/agent_365.py
@@ -1,4 +1,4 @@
-from typing import Final
+from typing import Final, Literal
 
 from pydantic import Field
 
@@ -61,6 +61,16 @@ class Agent365GuardrailConfigModel(GuardrailConfigModel):
         ),
     )
 
+    unreachable_fallback: Literal["fail_closed", "fail_open"] = Field(
+        default="fail_open",
+        description=(
+            "Behavior when Agent 365 or Entra is unreachable, times out, returns 5xx, or skips the evaluation. "
+            "'fail_open' (default) allows the tool call and records it as Unscanned in the logs, OpenTelemetry "
+            "and the litellm_guardrail_errors_total Prometheus counter. 'fail_closed' blocks it with HTTP 503. "
+            "Blocks, 4xx rejections, throttling and Entra token failures always block."
+        ),
+    )
+
     @staticmethod
     def ui_friendly_name() -> str:
         return "Microsoft Agent 365"
diff --git a/tests/test_litellm/integrations/test_prometheus_queue_guardrail_metrics.py b/tests/test_litellm/integrations/test_prometheus_queue_guardrail_metrics.py
index f04e8d0d2c7..9d608594047 100644
--- a/tests/test_litellm/integrations/test_prometheus_queue_guardrail_metrics.py
+++ b/tests/test_litellm/integrations/test_prometheus_queue_guardrail_metrics.py
@@ -554,3 +554,24 @@ class TestPrometheusGuardrailMetrics:
         mock_latency_metric.labels.assert_called_once()
         call_kwargs = mock_latency_metric.labels.call_args[1]
         assert call_kwargs["guardrail_name"] == guardrail_name
+
+    def test_record_guardrail_fail_open_increments_errors_total(self):
+        prometheus_logger = PrometheusLogger()
+
+        prometheus_logger.record_guardrail_fail_open(guardrail_name="a365", hook_type="pre_call")
+        prometheus_logger.record_guardrail_fail_open(guardrail_name="a365", hook_type="pre_call")
+
+        assert (
+            REGISTRY.get_sample_value(
+                "litellm_guardrail_errors_total",
+                {"guardrail_name": "a365", "error_type": "fail_open", "hook_type": "pre_call"},
+            )
+            == 2.0
+        )
+        assert (
+            REGISTRY.get_sample_value(
+                "litellm_guardrail_requests_total",
+                {"guardrail_name": "a365", "status": "success", "hook_type": "pre_call"},
+            )
+            is None
+        )
diff --git a/tests/test_litellm/proxy/guardrails/guardrail_hooks/test_agent_365.py b/tests/test_litellm/proxy/guardrails/guardrail_hooks/test_agent_365.py
index f9b7561b9d3..7ccb30b960c 100644
--- a/tests/test_litellm/proxy/guardrails/guardrail_hooks/test_agent_365.py
+++ b/tests/test_litellm/proxy/guardrails/guardrail_hooks/test_agent_365.py
@@ -11,6 +11,7 @@ import litellm
 from litellm.caching.caching import DualCache
 from litellm.exceptions import Timeout as LitellmTimeout
 from litellm.integrations.custom_guardrail import CustomGuardrail
+from litellm.integrations.prometheus import PrometheusLogger
 from litellm.litellm_core_utils.litellm_logging import Logging as LiteLLMLoggingObj
 from litellm.litellm_core_utils.secret_redaction import redact_string
 from litellm.proxy._types import UserAPIKeyAuth
@@ -20,6 +21,7 @@ from litellm.proxy.guardrails.guardrail_hooks.agent_365 import (
     guardrail_initializer_registry,
     initialize_guardrail,
 )
+from litellm.proxy.guardrails.guardrail_hooks.agent_365.agent_365 import registered_prometheus_logger
 from litellm.proxy.utils import ProxyLogging
 from litellm.types.guardrails import (
     GuardrailEventHooks,
@@ -117,12 +119,21 @@ class FakeHandler:
         return item
 
 
+class FakePrometheus:
+    def __init__(self) -> None:
+        self.fail_opens: list[tuple[str, str]] = []
+
+    def record_guardrail_fail_open(self, guardrail_name: str, hook_type: str) -> None:
+        self.fail_opens.append((guardrail_name, hook_type))
+
+
 def _make_guardrail(
     handler: FakeHandler,
     *,
     unreachable_fallback: str = "fail_closed",
     agent_id: str | None = None,
     api_base: str = AGENT_365_PROD_API_BASE,
+    prometheus: FakePrometheus | None = None,
 ) -> Agent365Guardrail:
     return Agent365Guardrail(
         guardrail_name="agent-365-guard",
@@ -133,6 +144,20 @@ def _make_guardrail(
         agent_id=agent_id,
         unreachable_fallback=unreachable_fallback,
         async_handler=handler,
+        prometheus_logger_lookup=lambda: prometheus,
+        event_hook="pre_mcp_call",
+        default_on=True,
+    )
+
+
+def _default_fallback_guardrail(handler: FakeHandler, prometheus: FakePrometheus | None = None) -> Agent365Guardrail:
+    return Agent365Guardrail(
+        guardrail_name="agent-365-guard",
+        tenant_id="tenant-abc",
+        client_id="client-xyz",
+        client_secret="secret-123",
+        async_handler=handler,
+        prometheus_logger_lookup=lambda: prometheus,
         event_hook="pre_mcp_call",
         default_on=True,
     )
@@ -218,8 +243,32 @@ class TestInitializeGuardrail:
         assert guardrail.client_secret == "env-secret"
         assert guardrail.api_base == "https://env.example.test"
         assert guardrail.resource_app_id == AGENT_365_PROD_RESOURCE_APP_ID
+        assert guardrail.unreachable_fallback == "fail_open"
+
+    def test_unset_fallback_survives_a_model_dump_round_trip(self):
+        stored: Final = LitellmParams(
+            guardrail="agent_365", mode="pre_mcp_call", tenant_id="t", client_id="c", client_secret="s"
+        ).model_dump()
+        assert stored["unreachable_fallback"] is None
+        guardrail: Final = initialize_guardrail(LitellmParams(**stored), {"guardrail_name": "a365-db"})
+        assert guardrail.unreachable_fallback == "fail_open"
+
+    def test_explicit_fail_closed_is_kept(self):
+        params: Final = LitellmParams(
+            guardrail="agent_365",
+            mode="pre_mcp_call",
+            tenant_id="t",
+            client_id="c",
+            client_secret="s",
+            unreachable_fallback="fail_closed",
+        )
+        guardrail: Final = initialize_guardrail(params, {"guardrail_name": "a365-closed"})
         assert guardrail.unreachable_fallback == "fail_closed"
 
+    def test_agent_365_default_leaves_other_guardrails_unset(self):
+        assert LitellmParams(guardrail="generic_guardrail_api", mode="pre_call").unreachable_fallback is None
+        assert Agent365GuardrailConfigModel.model_fields["unreachable_fallback"].default == "fail_open"
+
     def test_explicit_params_win(self, monkeypatch):
         monkeypatch.setenv("AGENT365_TENANT_ID", "env-tenant")
         params: Final = LitellmParams(
@@ -471,6 +520,70 @@ class TestDefenderNotEvaluated:
         assert "rejected" in exc_info.value.detail["error"]
 
 
+class TestFailOpenDefault:
+    @pytest.mark.asyncio
+    async def test_constructor_default_lets_timed_out_evaluation_through_unscanned(self):
+        handler: Final = FakeHandler([_token_response(), httpx.ReadTimeout("timed out")])
+        guardrail: Final = _default_fallback_guardrail(handler)
+        assert guardrail.unreachable_fallback == "fail_open"
+        data: Final = _mcp_data()
+        assert await _run(guardrail, data) is data
+        info: Final = _guardrail_info(data)
+        assert info["guardrail_status"] == "guardrail_failed_to_respond"
+        assert info["guardrail_response"]["verdict"] == "Unscanned"
+
+    @pytest.mark.asyncio
+    async def test_constructor_default_still_blocks_a_policy_block(self):
+        handler: Final = FakeHandler([_token_response(), _block_response()])
+        guardrail: Final = _default_fallback_guardrail(handler)
+        with pytest.raises(HTTPException) as exc_info:
+            await _run(guardrail, _mcp_data())
+        assert exc_info.value.status_code == 400
+
+    @pytest.mark.asyncio
+    @pytest.mark.parametrize(
+        "responses",
+        [
+            [_token_response(), httpx.ReadTimeout("timed out")],
+            [_token_response(), _response(502, text="bad gateway")],
+            [_token_response(), _not_evaluated_response("Skipped")],
+            [_response(503, text="entra down")],
+        ],
+    )
+    async def test_each_fail_open_counts_once_in_prometheus(self, responses):
+        prometheus: Final = FakePrometheus()
+        guardrail: Final = _default_fallback_guardrail(FakeHandler(responses), prometheus)
+        data: Final = _mcp_data()
+        assert await _run(guardrail, data) is data
+        assert prometheus.fail_opens == [("agent-365-guard", "pre_call")]
+
+    @pytest.mark.asyncio
+    async def test_allowed_and_blocked_calls_do_not_count_as_fail_open(self):
+        prometheus: Final = FakePrometheus()
+        handler: Final = FakeHandler([_token_response(), _allow_response(), _block_response()])
+        guardrail: Final = _default_fallback_guardrail(handler, prometheus)
+        await _run(guardrail, _mcp_data())
+        with pytest.raises(HTTPException):
+            await _run(guardrail, _mcp_data())
+        assert prometheus.fail_opens == []
+
+    @pytest.mark.asyncio
+    async def test_fail_closed_does_not_count_as_fail_open(self):
+        prometheus: Final = FakePrometheus()
+        handler: Final = FakeHandler([_token_response(), httpx.ReadTimeout("timed out")])
+        guardrail: Final = _make_guardrail(handler, unreachable_fallback="fail_closed", prometheus=prometheus)
+        with pytest.raises(HTTPException):
+            await _run(guardrail, _mcp_data())
+        assert prometheus.fail_opens == []
+
+    def test_registered_prometheus_logger_reads_litellm_callbacks(self, monkeypatch):
+        monkeypatch.setattr(litellm, "callbacks", [])
+        assert registered_prometheus_logger() is None
+        logger: Final = PrometheusLogger.__new__(PrometheusLogger)
+        monkeypatch.setattr(litellm, "callbacks", ["langfuse", logger])
+        assert registered_prometheus_logger() is logger
+
+
 class TestUnreachableFallback:
     @pytest.mark.asyncio
     async def test_evaluate_litellm_timeout_fail_closed(self):
diff --git a/ui/litellm-dashboard/src/app/(dashboard)/guardrails/_components/TeamGuardrailsTab.tsx b/ui/litellm-dashboard/src/app/(dashboard)/guardrails/_components/TeamGuardrailsTab.tsx
index d45cfc3fe7d..614fdaefade 100644
--- a/ui/litellm-dashboard/src/app/(dashboard)/guardrails/_components/TeamGuardrailsTab.tsx
+++ b/ui/litellm-dashboard/src/app/(dashboard)/guardrails/_components/TeamGuardrailsTab.tsx
@@ -210,6 +210,14 @@ const TEAM_COLORS: Record<string, string> = {
   Finance: "bg-success/15 text-success",
 };
 
+const FAIL_OPEN_BY_DEFAULT_GUARDRAILS: ReadonlySet<string> = new Set(["agent_365", "typesafe"]);
+
+function defaultUnreachableFallback(guardrailType: string | undefined): "fail_open" | "fail_closed" {
+  return guardrailType !== undefined && FAIL_OPEN_BY_DEFAULT_GUARDRAILS.has(guardrailType)
+    ? "fail_open"
+    : "fail_closed";
+}
+
 function buildEquivalentConfigYaml(g: TeamGuardrail): string {
   const lines: string[] = [
     "litellm_settings:",
@@ -220,7 +228,7 @@ function buildEquivalentConfigYaml(g: TeamGuardrail): string {
     `        mode: ${g.mode ?? "pre_call"}  # or post_call, during_call`,
     `        api_base: ${g.endpoint || "https://your-guardrail-api.com"}`,
     "        api_key: os.environ/YOUR_GUARDRAIL_API_KEY  # optional",
-    `        unreachable_fallback: ${g.unreachable_fallback ?? "fail_closed"}  # default: fail_closed. Set to fail_open to proceed if the guardrail endpoint is unreachable.`,
+    `        unreachable_fallback: ${g.unreachable_fallback ?? defaultUnreachableFallback(g.guardrailType)}  # fail_closed blocks, fail_open proceeds when the guardrail endpoint is unreachable. Shown value is this guardrail's default.`,
     `        forward_api_key: ${g.forwardKey}`,
   ];
   if (g.model && g.model !== "—") {
diff --git a/ui/litellm-dashboard/src/lib/http/schema.d.ts b/ui/litellm-dashboard/src/lib/http/schema.d.ts
index bba67bcf6c2..cff334981ca 100644
--- a/ui/litellm-dashboard/src/lib/http/schema.d.ts
+++ b/ui/litellm-dashboard/src/lib/http/schema.d.ts
@@ -25570,11 +25570,9 @@ export interface components {
             timeout?: number | null;
             /**
              * Unreachable Fallback
-             * @description Behavior when a guardrail endpoint is unreachable due to network errors. Implemented by guardrail='generic_guardrail_api', 'agent_365', 'akto', 'vigil_guard', 'repelloai', 'headroom', 'compresr', and 'typesafe'. 'fail_closed' raises an error (default). 'fail_open' logs a critical error and allows the request to proceed.
-             * @default fail_closed
-             * @enum {string}
+             * @description Behavior when a guardrail endpoint is unreachable due to network errors. Implemented by guardrail='generic_guardrail_api', 'agent_365', 'akto', 'vigil_guard', 'repelloai', 'headroom', 'compresr', and 'typesafe'. 'fail_closed' raises an error. 'fail_open' logs a critical error and allows the request to proceed. Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed.
              */
-            unreachable_fallback: "fail_closed" | "fail_open";
+            unreachable_fallback?: ("fail_closed" | "fail_open") | null;
             /**
              * Violation Message Template
              * @description Custom message when a guardrail blocks an action. Supports placeholders like {tool_name}, {rule_id}, and {default_message}.
@@ -34786,11 +34784,9 @@ export interface components {
             tracker_api_key?: string | null;
             /**
              * Unreachable Fallback
-             * @description Behavior when the headroom compression service is unreachable or errors. 'fail_closed' raises an error (default). 'fail_open' logs a critical error and forwards the request uncompressed instead of blocking it.
-             * @default fail_closed
-             * @enum {string}
+             * @description Behavior when the guardrail endpoint is unreachable. 'fail_closed' blocks, 'fail_open' allows and logs. Unset applies the guardrail's own default: 'agent_365' and 'typesafe' fail open, the others fail closed.
              */
-            unreachable_fallback: "fail_closed" | "fail_open";
+            unreachable_fallback?: ("fail_closed" | "fail_open") | null;
             /**
              * Use V2
              * @description If True and guardrail='noma', route to the new Noma v2 implementation instead of the legacy implementation.