diff --git a/docs/devops/single_azure_vm/k8s/setup-k8s.sh b/docs/devops/single_azure_vm/k8s/setup-k8s.sh
index 7b5478a8..7c567874 100755
--- a/docs/devops/single_azure_vm/k8s/setup-k8s.sh
+++ b/docs/devops/single_azure_vm/k8s/setup-k8s.sh
@@ -11,13 +11,14 @@
 # What this script does:
 #   Phase 1: Pre-flight checks (verify docker phases ran)
 #   Phase 2: Install k3s (lightweight K8s)
-#   Phase 3: Build Docker images + import into k3s containerd
+#   Phase 3: Build Docker images (reused by k3s via --docker runtime)
 #   Phase 4: Generate K8s secrets (JWT, etc.)
 #   Phase 5: Apply K8s manifests (namespaces → config → infra → platform → products)
 #   Phase 6: Health check
 #
 # Usage:
 #   sudo ./setup-k8s.sh                  # Full install
+#   sudo ./setup-k8s.sh --resume         # Auto-resume from last completed phase
 #   sudo ./setup-k8s.sh --phase=N        # Run single phase (1-6)
 #   sudo ./setup-k8s.sh --status         # Show phase status
 #   sudo ./setup-k8s.sh --reset          # Clear markers, start fresh
@@ -58,10 +59,9 @@ ok()   { echo -e "${GREEN}  ✓ $*${NC}"; }
 warn() { echo -e "${YELLOW}  ⚠ $*${NC}"; }
 fail() { echo -e "${RED}  ✗ $*${NC}" >&2; exit 1; }
 
-mkdir -p "$STATE_DIR"
-mark_phase_done()   { date -Iseconds > "${STATE_DIR}/phase${1}.done"; }
+mark_phase_done()   { mkdir -p "$STATE_DIR"; date -Iseconds > "${STATE_DIR}/phase${1}.done"; }
 is_phase_done()     { [ -f "${STATE_DIR}/phase${1}.done" ]; }
-reset_markers()     { rm -f "${STATE_DIR}"/phase*.done; log "Phase markers cleared."; }
+reset_markers()     { rm -f "${STATE_DIR}"/phase*.done 2>/dev/null; log "Phase markers cleared."; }
 
 last_completed_phase() {
   local last=0
@@ -233,6 +233,10 @@ phase3_images() {
   log "  Built: ${build_ok}, Failed: ${build_fail}"
   [ "$build_fail" -eq 0 ] || warn "  ${build_fail} images failed to build. Fix and re-run: sudo ./setup-k8s.sh --phase=3"
 
+  if [ "$build_fail" -gt 0 ]; then
+    fail "Phase 3 incomplete: ${build_fail}/${total} images failed. Fix and re-run: sudo ./setup-k8s.sh --phase=3"
+  fi
+
   ok "Phase 3 complete. ${build_ok}/${total} images ready."
 }