diff --git a/libbeat/publisher/pipeline/client_test.go b/libbeat/publisher/pipeline/client_test.go
index e5fa370e292c..a3f0c822b9e8 100644
--- a/libbeat/publisher/pipeline/client_test.go
+++ b/libbeat/publisher/pipeline/client_test.go
@@ -19,6 +19,8 @@ package pipeline
 
 import (
 	"context"
+	"errors"
+	"io"
 	"sync"
 	"testing"
 	"time"
@@ -28,6 +30,7 @@ import (
 
 	"github.com/elastic/beats/v7/libbeat/beat"
 	"github.com/elastic/beats/v7/libbeat/outputs"
+	"github.com/elastic/beats/v7/libbeat/processors"
 	"github.com/elastic/beats/v7/libbeat/publisher"
 	"github.com/elastic/beats/v7/libbeat/publisher/processing"
 	"github.com/elastic/beats/v7/libbeat/publisher/queue"
@@ -35,26 +38,25 @@ import (
 	"github.com/elastic/beats/v7/libbeat/tests/resources"
 	conf "github.com/elastic/elastic-agent-libs/config"
 	"github.com/elastic/elastic-agent-libs/logp"
+	"github.com/elastic/elastic-agent-libs/mapstr"
 	"github.com/elastic/elastic-agent-libs/monitoring"
 )
 
-func TestClient(t *testing.T) {
-	makePipeline := func(settings Settings, qu queue.Queue) *Pipeline {
-		p, err := New(beat.Info{},
-			Monitors{},
-			conf.Namespace{},
-			outputs.Group{},
-			settings,
-		)
-		if err != nil {
-			panic(err)
-		}
-		// Inject a test queue so the outputController doesn't create one
-		p.outputController.queue = qu
+func makePipeline(t *testing.T, settings Settings, qu queue.Queue) *Pipeline {
+	p, err := New(beat.Info{},
+		Monitors{},
+		conf.Namespace{},
+		outputs.Group{},
+		settings,
+	)
+	require.NoError(t, err)
+	// Inject a test queue so the outputController doesn't create one
+	p.outputController.queue = qu
 
-		return p
-	}
+	return p
+}
 
+func TestClient(t *testing.T) {
 	t.Run("client close", func(t *testing.T) {
 		// Note: no asserts. If closing fails we have a deadlock, because Publish
 		// would block forever
@@ -90,7 +92,7 @@ func TestClient(t *testing.T) {
 				routinesChecker := resources.NewGoroutinesChecker()
 				defer routinesChecker.Check(t)
 
-				pipeline := makePipeline(Settings{}, makeTestQueue())
+				pipeline := makePipeline(t, Settings{}, makeTestQueue())
 				defer pipeline.Close()
 
 				var ctx context.Context
@@ -119,6 +121,105 @@ func TestClient(t *testing.T) {
 			})
 		}
 	})
+
+	t.Run("no infinite loop when processing fails", func(t *testing.T) {
+		logp.TestingSetup()
+		l := logp.L()
+
+		// a small in-memory queue with a very short flush interval
+		q := memqueue.NewQueue(l, nil, memqueue.Settings{
+			Events:         5,
+			FlushMinEvents: 1,
+			FlushTimeout:   time.Millisecond,
+		}, 5)
+
+		// model a processor that we're going to make produce errors after
+		p := &testProcessor{}
+		ps := testProcessorSupporter{Processor: p}
+
+		// now we create a pipeline that makes sure that all
+		// events are acked while shutting down
+		pipeline := makePipeline(t, Settings{
+			WaitClose:     100 * time.Millisecond,
+			WaitCloseMode: WaitOnPipelineClose,
+			Processors:    ps,
+		}, q)
+		client, err := pipeline.Connect()
+		require.NoError(t, err)
+		defer client.Close()
+
+		// consuming all the published events
+		var received []beat.Event
+		done := make(chan struct{})
+		go func() {
+			for {
+				batch, err := q.Get(2)
+				if errors.Is(err, io.EOF) {
+					break
+				}
+				assert.NoError(t, err)
+				if batch == nil {
+					continue
+				}
+				for i := 0; i < batch.Count(); i++ {
+					e := batch.Entry(i).(publisher.Event)
+					received = append(received, e.Content)
+				}
+				batch.Done()
+			}
+			close(done)
+		}()
+
+		sent := []beat.Event{
+			{
+				Fields: mapstr.M{"number": 1},
+			},
+			{
+				Fields: mapstr.M{"number": 2},
+			},
+			{
+				Fields: mapstr.M{"number": 3},
+			},
+			{
+				Fields: mapstr.M{"number": 4},
+			},
+		}
+
+		expected := []beat.Event{
+			{
+				Fields: mapstr.M{"number": 1, "test": "value"},
+			},
+			{
+				Fields: mapstr.M{"number": 2, "test": "value"},
+			},
+			// {
+			// 	// this event must be excluded due to the processor error
+			// 	Fields: mapstr.M{"number": 3},
+			// },
+			{
+				Fields: mapstr.M{"number": 4, "test": "value"},
+			},
+		}
+
+		client.PublishAll(sent[:2]) // first 2
+
+		// this causes our processor to malfunction and produce errors for all events
+		p.ErrorSwitch()
+
+		client.PublishAll(sent[2:3]) // number 3
+
+		// back to normal
+		p.ErrorSwitch()
+
+		client.PublishAll(sent[3:]) // number 4
+
+		client.Close()
+		pipeline.Close()
+
+		// waiting for all events to be consumed from the queue
+		<-done
+		require.Equal(t, expected, received)
+	})
 }
 
 func TestClientWaitClose(t *testing.T) {
@@ -258,3 +359,39 @@ func TestMonitoring(t *testing.T) {
 	assert.Equal(t, int64(batchSize), telemetrySnapshot.Ints["output.batch_size"])
 	assert.Equal(t, int64(numClients), telemetrySnapshot.Ints["output.clients"])
 }
+
+type testProcessor struct{ error bool }
+
+func (p *testProcessor) String() string {
+	return "testProcessor"
+}
+func (p *testProcessor) Run(in *beat.Event) (event *beat.Event, err error) {
+	if p.error {
+		return nil, errors.New("test error")
+	}
+	_, err = in.Fields.Put("test", "value")
+	return in, err
+}
+
+func (p *testProcessor) ErrorSwitch() {
+	p.error = !p.error
+}
+
+type testProcessorSupporter struct {
+	beat.Processor
+}
+
+// Create a running processor interface based on the given config
+func (p testProcessorSupporter) Create(cfg beat.ProcessingConfig, drop bool) (beat.Processor, error) {
+	return p.Processor, nil
+}
+
+// Processors returns a list of config strings for the given processor, for debug purposes
+func (p testProcessorSupporter) Processors() []string {
+	return []string{p.Processor.String()}
+}
+
+// Close the processor supporter
+func (p testProcessorSupporter) Close() error {
+	return processors.Close(p.Processor)
+}