diff --git a/src/WorkflowCore/Services/ExecutionResultProcessor.cs b/src/WorkflowCore/Services/ExecutionResultProcessor.cs
index cdf0a9b42..730dbc911 100755
--- a/src/WorkflowCore/Services/ExecutionResultProcessor.cs
+++ b/src/WorkflowCore/Services/ExecutionResultProcessor.cs
@@ -110,8 +110,8 @@ public void HandleStepException(WorkflowInstance workflow, WorkflowDefinition de
             {
                 var exceptionPointer = queue.Dequeue();
                 var exceptionStep = def.Steps.FindById(exceptionPointer.StepId);
-                var compensatingStepId = FindScopeCompensationStepId(workflow, def, exceptionPointer);
-                var errorOption = (exceptionStep.ErrorBehavior ?? (compensatingStepId.HasValue ? WorkflowErrorHandling.Compensate : def.DefaultErrorBehavior));
+                var shouldCompensate = ShouldCompensate(workflow, def, exceptionPointer);
+                var errorOption = (exceptionStep.ErrorBehavior ?? (shouldCompensate ? WorkflowErrorHandling.Compensate : def.DefaultErrorBehavior));
 
                 foreach (var handler in _errorHandlers.Where(x => x.Type == errorOption))
                 {
@@ -120,7 +120,7 @@ public void HandleStepException(WorkflowInstance workflow, WorkflowDefinition de
             }
         }
         
-        private int? FindScopeCompensationStepId(WorkflowInstance workflow, WorkflowDefinition def, ExecutionPointer currentPointer)
+        private bool ShouldCompensate(WorkflowInstance workflow, WorkflowDefinition def, ExecutionPointer currentPointer)
         {
             var scope = new Stack<string>(currentPointer.Scope);
             scope.Push(currentPointer.Id);
@@ -130,11 +130,11 @@ public void HandleStepException(WorkflowInstance workflow, WorkflowDefinition de
                 var pointerId = scope.Pop();
                 var pointer = workflow.ExecutionPointers.FindById(pointerId);
                 var step = def.Steps.FindById(pointer.StepId);
-                if (step.CompensationStepId.HasValue)
-                    return step.CompensationStepId.Value;
+                if ((step.CompensationStepId.HasValue) || (step.RevertChildrenAfterCompensation))
+                    return true;
             }
 
-            return null;
+            return false;
         }
     }
 }
\ No newline at end of file
diff --git a/test/WorkflowCore.IntegrationTests/Scenarios/DynamicDataIOScenario.cs b/test/WorkflowCore.IntegrationTests/Scenarios/DynamicDataIOScenario.cs
index 4c1c013ba..416db55f2 100644
--- a/test/WorkflowCore.IntegrationTests/Scenarios/DynamicDataIOScenario.cs
+++ b/test/WorkflowCore.IntegrationTests/Scenarios/DynamicDataIOScenario.cs
@@ -38,7 +38,7 @@ public int this[string propertyName]
 
         public class DataIOWorkflow : IWorkflow<MyDataClass>
         {
-            public string Id => "DataIOWorkflow";
+            public string Id => "DynamicDataIOWorkflow";
             public int Version => 1;
             public void Build(IWorkflowBuilder<MyDataClass> builder)
             {
diff --git a/test/WorkflowCore.IntegrationTests/Scenarios/FailingSagaScenario.cs b/test/WorkflowCore.IntegrationTests/Scenarios/FailingSagaScenario.cs
new file mode 100644
index 000000000..36c12c3bd
--- /dev/null
+++ b/test/WorkflowCore.IntegrationTests/Scenarios/FailingSagaScenario.cs
@@ -0,0 +1,65 @@
+using System;
+using System.Collections.Generic;
+using System.Text;
+using WorkflowCore.Interface;
+using WorkflowCore.Models;
+using Xunit;
+using FluentAssertions;
+using System.Linq;
+using WorkflowCore.Testing;
+
+namespace WorkflowCore.IntegrationTests.Scenarios
+{
+    public class FailingSagaScenario : WorkflowTest<FailingSagaScenario.Workflow, object>
+    {
+        public class Workflow : IWorkflow<object>
+        {
+            public static int Event1Fired;
+            public static int Event2Fired;
+            public static int Event3Fired;
+            
+            public string Id => "NestedRetrySaga2Workflow";
+            public int Version => 1;
+            public void Build(IWorkflowBuilder<object> builder)
+            {
+                builder
+                    .StartWith(context => ExecutionResult.Next())
+                    .Saga(x => x
+                        .StartWith(context => ExecutionResult.Next())
+                        .If(data => true)
+                            .Do(i => i
+                                .StartWith(context =>
+                                {
+                                    Event1Fired++;
+                                    throw new Exception();
+                                })
+                            )
+                        .Then(context => Event2Fired++)
+                        )
+                        .OnError(WorkflowErrorHandling.Terminate)
+                    .Then(context => Event3Fired++);
+            }
+        }
+
+        public FailingSagaScenario()
+        {
+            Setup();
+            Workflow.Event1Fired = 0;
+            Workflow.Event2Fired = 0;
+            Workflow.Event3Fired = 0;
+        }
+                
+        [Fact]
+        public void Scenario()
+        {
+            var workflowId = StartWorkflow(null);
+            WaitForWorkflowToComplete(workflowId, TimeSpan.FromSeconds(30));
+
+            GetStatus(workflowId).Should().Be(WorkflowStatus.Terminated);
+            UnhandledStepErrors.Count.Should().Be(1);
+            Workflow.Event1Fired.Should().Be(1);
+            Workflow.Event2Fired.Should().Be(0);
+            Workflow.Event3Fired.Should().Be(0);
+        }
+    }
+}