diff --git a/src/compute-plane-services/worker-utils/service/BUILD.bazel b/src/compute-plane-services/worker-utils/service/BUILD.bazel
index e334f3abc..bf374b42d 100644
--- a/src/compute-plane-services/worker-utils/service/BUILD.bazel
+++ b/src/compute-plane-services/worker-utils/service/BUILD.bazel
@@ -2,7 +2,10 @@ load("@rules_go//go:def.bzl", "go_library", "go_test")
 
 go_library(
     name = "service",
-    srcs = ["service.go"],
+    srcs = [
+        "service.go",
+        "shutdown.go",
+    ],
     importpath = "github.com/NVIDIA/nvcf/src/compute-plane-services/worker-utils/service",
     visibility = ["//visibility:public"],
     deps = [
@@ -28,6 +31,7 @@ go_test(
         "main_test.go",
         "service_command_test.go",
         "service_test.go",
+        "shutdown_test.go",
     ],
     embed = [":service"],
     # keep: binds the upstream-hardcoded fixed ports (asset 8001, S3 8002, NVCF
diff --git a/src/compute-plane-services/worker-utils/service/service.go b/src/compute-plane-services/worker-utils/service/service.go
index f069e5ba8..c6a9f496b 100644
--- a/src/compute-plane-services/worker-utils/service/service.go
+++ b/src/compute-plane-services/worker-utils/service/service.go
@@ -58,7 +58,7 @@ func Run() {
 		}
 	}
 	err := NewRootCommand(context.Background(), logger).Execute()
-	if err != nil && err.Error() != "received signal interrupt" {
+	if isFatalRunError(err) {
 		utils.ExitReason(err)
 		zap.S().Panic(err)
 	}
diff --git a/src/compute-plane-services/worker-utils/service/shutdown.go b/src/compute-plane-services/worker-utils/service/shutdown.go
new file mode 100644
index 000000000..3173db712
--- /dev/null
+++ b/src/compute-plane-services/worker-utils/service/shutdown.go
@@ -0,0 +1,26 @@
+/*
+SPDX-FileCopyrightText: Copyright (c) 2026 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+SPDX-License-Identifier: Apache-2.0
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package service
+
+import "github.com/NVIDIA/nvcf/src/compute-plane-services/worker-utils/worker"
+
+// isFatalRunError reports whether a terminal error from the root command is a
+// genuine failure rather than the expected response to a shutdown signal.
+func isFatalRunError(err error) bool {
+	return err != nil && !worker.IsShutdownSignalError(err)
+}
diff --git a/src/compute-plane-services/worker-utils/service/shutdown_test.go b/src/compute-plane-services/worker-utils/service/shutdown_test.go
new file mode 100644
index 000000000..794aa75c1
--- /dev/null
+++ b/src/compute-plane-services/worker-utils/service/shutdown_test.go
@@ -0,0 +1,54 @@
+/*
+SPDX-FileCopyrightText: Copyright (c) 2026 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+SPDX-License-Identifier: Apache-2.0
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package service
+
+import (
+	"errors"
+	"testing"
+)
+
+// TestIsFatalRunError_SIGTERM is the regression test for Run() panicking on a
+// normal container stop. Kubernetes stops containers with SIGTERM, which the
+// servers run group surfaces as "received signal terminated"; only the SIGINT
+// wording used to be excused, so every graceful shutdown panicked.
+func TestIsFatalRunError_SIGTERM(t *testing.T) {
+	if isFatalRunError(errors.New("received signal terminated")) {
+		t.Fatal("SIGTERM shutdown must not be treated as a fatal run error")
+	}
+}
+
+func TestIsFatalRunError(t *testing.T) {
+	tests := []struct {
+		name string
+		err  error
+		want bool
+	}{
+		{name: "clean exit", err: nil, want: false},
+		{name: "sigterm", err: errors.New("received signal terminated"), want: false},
+		{name: "sigint", err: errors.New("received signal interrupt"), want: false},
+		{name: "startup failure", err: errors.New("inference container not ready"), want: true},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			if got := isFatalRunError(tt.err); got != tt.want {
+				t.Fatalf("isFatalRunError(%v) = %v, want %v", tt.err, got, tt.want)
+			}
+		})
+	}
+}
diff --git a/src/compute-plane-services/worker-utils/worker/BUILD.bazel b/src/compute-plane-services/worker-utils/worker/BUILD.bazel
index 41c99508c..924dafdfc 100644
--- a/src/compute-plane-services/worker-utils/worker/BUILD.bazel
+++ b/src/compute-plane-services/worker-utils/worker/BUILD.bazel
@@ -6,6 +6,7 @@ go_library(
         "cancel.go",
         "large.go",
         "refresh.go",
+        "shutdown.go",
         "stateful.go",
         "work.go",
         "worker.go",
@@ -67,6 +68,7 @@ go_test(
         "large_helpers_test.go",
         "main_test.go",
         "newworker_test.go",
+        "shutdown_test.go",
         "work_helpers_test.go",
         "work_test.go",
         "worker_extra_test.go",
diff --git a/src/compute-plane-services/worker-utils/worker/shutdown.go b/src/compute-plane-services/worker-utils/worker/shutdown.go
new file mode 100644
index 000000000..899dedf2c
--- /dev/null
+++ b/src/compute-plane-services/worker-utils/worker/shutdown.go
@@ -0,0 +1,67 @@
+/*
+SPDX-FileCopyrightText: Copyright (c) 2026 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+SPDX-License-Identifier: Apache-2.0
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package worker
+
+import (
+	"os"
+	"strings"
+	"syscall"
+)
+
+// signalErrorPrefix is how the nvkit servers run group formats the terminal
+// error it returns when a shutdown signal arrives. Keep in sync with the
+// signal actor in pkg/nvkit/servers/grpc.go, which returns
+// fmt.Errorf("received signal %s", sig).
+const signalErrorPrefix = "received signal "
+
+// shutdownSignals are the signals that run group installs a handler for.
+// SIGTERM is how Kubernetes asks a container to stop, so it is the signal the
+// worker actually sees in production; SIGINT only shows up in local runs.
+var shutdownSignals = []os.Signal{syscall.SIGINT, syscall.SIGTERM}
+
+// IsShutdownSignalError reports whether err is the run group reporting a
+// graceful shutdown signal rather than a server failure.
+//
+// The servers package models a shutdown signal as a terminal error, so an
+// expected stop and a genuine crash both reach callers as ordinary errors and
+// can only be told apart by inspecting the message. Matching is derived from
+// the signal names rather than one hard-coded string: comparing against the
+// SIGINT wording alone classified every SIGTERM, and therefore every normal pod
+// termination, as a crash.
+func IsShutdownSignalError(err error) bool {
+	if err == nil {
+		return false
+	}
+
+	msg := err.Error()
+	for _, sig := range shutdownSignals {
+		if strings.Contains(msg, signalErrorPrefix+sig.String()) {
+			return true
+		}
+	}
+	return false
+}
+
+// isFatalServerError reports whether an error returned by the worker's server
+// run group is a genuine failure worth crashing the process for.
+//
+// A shutdown signal is never fatal. The shutdown context is still consulted so
+// that a real server error raced against an in-progress shutdown stays quiet.
+func (w *NVCFWorker) isFatalServerError(err error) bool {
+	return err != nil && !IsShutdownSignalError(err) && w.shutdownCtx.Err() == nil
+}
diff --git a/src/compute-plane-services/worker-utils/worker/shutdown_test.go b/src/compute-plane-services/worker-utils/worker/shutdown_test.go
new file mode 100644
index 000000000..32d7f06ab
--- /dev/null
+++ b/src/compute-plane-services/worker-utils/worker/shutdown_test.go
@@ -0,0 +1,107 @@
+/*
+SPDX-FileCopyrightText: Copyright (c) 2026 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+SPDX-License-Identifier: Apache-2.0
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package worker
+
+import (
+	"context"
+	"errors"
+	"fmt"
+	"testing"
+)
+
+// sigtermRunError is the exact error the nvkit servers run group returns when
+// the process receives SIGTERM, which is how Kubernetes always asks a container
+// to stop. Reproduced verbatim from a production utils crash.
+const sigtermRunError = "received signal terminated"
+
+// sigintRunError is the SIGINT equivalent.
+const sigintRunError = "received signal interrupt"
+
+func TestIsShutdownSignalError(t *testing.T) {
+	tests := []struct {
+		name string
+		err  error
+		want bool
+	}{
+		{name: "sigterm", err: errors.New(sigtermRunError), want: true},
+		{name: "sigint", err: errors.New(sigintRunError), want: true},
+		{
+			name: "wrapped sigterm",
+			err:  fmt.Errorf("internal error: %w", errors.New(sigtermRunError)),
+			want: true,
+		},
+		{name: "unrelated failure", err: errors.New("listen tcp :9191: address already in use"), want: false},
+		{name: "signal-shaped but not a shutdown signal", err: errors.New("received signal killed"), want: false},
+		{name: "nil", err: nil, want: false},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			if got := IsShutdownSignalError(tt.err); got != tt.want {
+				t.Fatalf("IsShutdownSignalError(%v) = %v, want %v", tt.err, got, tt.want)
+			}
+		})
+	}
+}
+
+// TestIsFatalServerError_SIGTERMBeforeShutdownCancel is the regression test for
+// the utils panic at worker.go "internal error: received signal terminated".
+// The server run group always returns a non-nil error on SIGTERM, so when the
+// shutdown context has not been cancelled yet the old guard classified a normal
+// pod termination as a crash.
+func TestIsFatalServerError_SIGTERMBeforeShutdownCancel(t *testing.T) {
+	ctx, cancel := context.WithCancel(context.Background())
+	t.Cleanup(cancel)
+
+	w := &NVCFWorker{shutdownCtx: ctx}
+
+	if w.isFatalServerError(errors.New(sigtermRunError)) {
+		t.Fatal("SIGTERM with a live shutdown context must not be treated as a fatal server error")
+	}
+}
+
+func TestIsFatalServerError(t *testing.T) {
+	tests := []struct {
+		name             string
+		err              error
+		cancelBeforeCall bool
+		want             bool
+	}{
+		{name: "no error", err: nil, want: false},
+		{name: "sigterm", err: errors.New(sigtermRunError), want: false},
+		{name: "sigint", err: errors.New(sigintRunError), want: false},
+		{name: "real failure during shutdown", err: errors.New("boom"), cancelBeforeCall: true, want: false},
+		{name: "real failure while running", err: errors.New("boom"), want: true},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			ctx, cancel := context.WithCancel(context.Background())
+			t.Cleanup(cancel)
+			if tt.cancelBeforeCall {
+				cancel()
+			}
+
+			w := &NVCFWorker{shutdownCtx: ctx}
+
+			if got := w.isFatalServerError(tt.err); got != tt.want {
+				t.Fatalf("isFatalServerError(%v) = %v, want %v", tt.err, got, tt.want)
+			}
+		})
+	}
+}
diff --git a/src/compute-plane-services/worker-utils/worker/worker.go b/src/compute-plane-services/worker-utils/worker/worker.go
index 6041afe1f..561299741 100644
--- a/src/compute-plane-services/worker-utils/worker/worker.go
+++ b/src/compute-plane-services/worker-utils/worker/worker.go
@@ -402,7 +402,7 @@ func (w *NVCFWorker) Run(withHttpServer bool) error {
 		go func() {
 			// health server + framework config
 			err := w.server.Run()
-			if err != nil && w.shutdownCtx.Err() == nil {
+			if w.isFatalServerError(err) {
 				err = types.NewInternalError(err)
 				utils.ExitReason(err)
 				zap.S().Panic(err)