diff --git a/pkg/manager/hcp_proxy.go b/pkg/manager/hcp_proxy.go
index e67f982b..bc08bd7a 100644
--- a/pkg/manager/hcp_proxy.go
+++ b/pkg/manager/hcp_proxy.go
@@ -539,9 +539,14 @@ func (p *hcpProxy) checkHubPermission(
 	if _, probeErr := p.hubDynClient.Resource(gvr).Get(ctx, "managedcluster:admin", metav1.GetOptions{}); probeErr != nil {
 		if apierrors.IsNotFound(probeErr) {
 			if strings.Contains(probeErr.Error(), "the server could not find the requested resource") {
-				// API group is not registered (kind / non-ACM hub) — skip non-fatally.
-				p.log.Info("clusterview API not installed, skipping hub permission check")
-				return nil
+				// API group is not registered — only skip in E2E/kind environments.
+				// On production clusters this could indicate a partial MCE install failure;
+				// skipping would be a security risk.
+				if os.Getenv("SKIP_HUB_PERMISSION_CHECK") == "true" {
+					p.log.Info("clusterview API not installed, skipping hub permission check (SKIP_HUB_PERMISSION_CHECK=true)")
+					return nil
+				}
+				return fmt.Errorf("UserPermission is required in production. Please ensure the cluster has UserPermission configured")
 			}
 			// API exists but the SA has no admin bindings — expected. Proceed to step 2.
 		} else {
diff --git a/pkg/manager/hcp_proxy_test.go b/pkg/manager/hcp_proxy_test.go
index cab21cd2..7ce032b1 100644
--- a/pkg/manager/hcp_proxy_test.go
+++ b/pkg/manager/hcp_proxy_test.go
@@ -478,10 +478,11 @@ func Test_checkHubPermission_WhenViewOnlyUser_ItShouldReturnError(t *testing.T)
 	assert.Contains(t, err.Error(), "does not have admin access")
 }
 
-func Test_checkHubPermission_WhenClusterviewAPIAbsent_ItShouldSkipAndAllow(t *testing.T) {
-	// Simulates a kind/non-ACM hub: every request returns 404 with the
-	// "server could not find the requested resource" message, meaning the API group
-	// is not installed at all — the check is skipped non-fatally.
+func Test_checkHubPermission_WhenClusterviewAPIAbsent_WithEnvVar_ItShouldSkipAndAllow(t *testing.T) {
+	// Simulates a kind/non-ACM hub with SKIP_HUB_PERMISSION_CHECK=true:
+	// the API group is not installed and the env var allows skipping.
+	t.Setenv("SKIP_HUB_PERMISSION_CHECK", "true")
+
 	hubSrv := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
 		w.Header().Set(headerContentType, contentTypeJSON)
 		w.WriteHeader(http.StatusNotFound)
@@ -495,6 +496,25 @@ func Test_checkHubPermission_WhenClusterviewAPIAbsent_ItShouldSkipAndAllow(t *te
 	assert.NoError(t, err)
 }
 
+func Test_checkHubPermission_WhenClusterviewAPIAbsent_WithoutEnvVar_ItShouldFailClosed(t *testing.T) {
+	// Simulates a partial MCE install failure where the API is absent but
+	// SKIP_HUB_PERMISSION_CHECK is not set — should fail closed for security.
+	t.Setenv("SKIP_HUB_PERMISSION_CHECK", "")
+
+	hubSrv := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+		w.Header().Set(headerContentType, contentTypeJSON)
+		w.WriteHeader(http.StatusNotFound)
+		_, _ = io.WriteString(w, `{"kind":"Status","apiVersion":"v1","reason":"NotFound",`+
+			`"message":"the server could not find the requested resource"}`)
+	}))
+	defer hubSrv.Close()
+
+	p := newTestProxyWithHubServer(t, hubSrv.URL)
+	err := p.checkHubPermission(context.Background(), "anyuser", nil, "spoke-1")
+	assert.Error(t, err)
+	assert.Contains(t, err.Error(), "UserPermission is required in production")
+}
+
 func Test_checkHubPermission_WhenProbeReturnsResourceNotFound_ItShouldProceedToStep2(t *testing.T) {
 	// Simulates a real ACM hub where the clusterview API exists but the operator SA
 	// has no managedcluster:admin bindings. The probe (step 1) returns a proper resource-level
@@ -1600,6 +1620,7 @@ func availableManagedCluster(name string) *clusterv1.ManagedCluster {
 // checkHubPermission (used by handleRoute) skips non-fatally in unit tests.
 func newTestProxyWithSpokeURL(t *testing.T, spokeServerURL string, objs ...runtime.Object) *hcpProxy {
 	t.Helper()
+	t.Setenv("SKIP_HUB_PERMISSION_CHECK", "true")
 	p := newTestProxy(t, objs...)
 	hubSrv := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
 		w.Header().Set(headerContentType, contentTypeJSON)
diff --git a/test/e2e/addon-manager-deployment.yaml b/test/e2e/addon-manager-deployment.yaml
index f02d996f..cee61272 100644
--- a/test/e2e/addon-manager-deployment.yaml
+++ b/test/e2e/addon-manager-deployment.yaml
@@ -159,6 +159,9 @@ spec:
             # Skip TLS verify for the self-signed user-server serving cert.
             - name: CLUSTER_PROXY_INSECURE
               value: "true"
+            # kind has no clusterview API — skip hub permission check.
+            - name: SKIP_HUB_PERMISSION_CHECK
+              value: "true"
           volumeMounts:
             - mountPath: /etc/hcp-proxy/tls
               name: hcp-proxy-tls